Today's Australian labour force survey for November (due 1130 AEDT) follows a hawkish RBA meeting on Tuesday that effectively signalled the end of the easing cycle. The policy focus remains on the inflation side of the mandate, with labour market conditions still assessed to be broadly consistent with the RBA's full employment objective - despite the unemployment rate drifting higher this year. Markets go into today's report - the final major datapoint on the local calendar for the year - pricing in around of 50bps of RBA hikes in 2026; however, a weak report has the power to curtail some of that hawkish outlook.
November preview: Remaining on the fence
A moderate 20k rise in employment is expected in November, with estimates ranging from 10 to 40k. Employment is coming off a net gain of 42.2k in October - only the second upside surprise relative to consensus since April. With slower employment growth expected, the unemployment rate is forecast to lift from 4.3% to 4.4% (range: 4.2-4.4%).
Monthly reports have been unusually volatile of late, so markets have tended to stay on the fence. This has seen employment forecasts coming in consistently around the 20k mark. Year to date, employment has lifted by an average of 16k per month, but that has not matched pace with growth in the labour force, averaging 22.5k per month. The unemployment rate has trended higher through the year on this dynamic, though it still remains at low levels.
October recap: Employment rises as a 6-month high
Employment posted its strongest outcome in 6 months rising by 42.2k in October, more than double the 20k consensus. The full-time segment surged 55.3k to account for all of the headline gain, with part-time employment falling 13.1k.
With employment rising strongly and the labour force participation rate holding at 67%, the unemployment rate fell back to 4.3% - reversing its rise to 4.5% in September. In addition, the underemployment rate fell from 5.9% to 5.7%, seeing total labour force underutilisation tighten from 10.4% to 10%.
Total hours worked rose by 0.5% for the second month in succession, slightly outpacing the rise in employment (0.3%). Both the full time (0.5%) and part time segments (0.7%) saw hours worked advance. Annual growth in total hours lifted from 1.4% to 2.1%.
