Australia's Labour Force Survey for December is due today (1130 AEDT). This is one of two key data points - the other being next week's Q4 CPI report - ahead of the RBA's first meeting for 2026 on February 2-3. Markets are pricing in around 50bps of tightening this year, though a hike isn't expected until May.
December preview: Rebound expected
Expectations are somewhat more elevated going into today's report after employment contracted by its most since February 2025 in October (-21.3k). Employment is forecast to rise by 26.5k (9-month high), with estimates ranging from 18-45k. As the chart below shows, outcomes for employment (green line) have been highly volatile throughout 2025, so forecasts are generally held with relatively little conviction.
The unemployment rate in December is expected to tick up to 4.4% (range: 4.3-4.5%) from 4.3% in the prior two months. Much will depend on the participation rate as to where the unemployment rate comes in. A rise in the unemployment rate is expected partly because participation will be anticipated to rebound after falling to an 8-month low in November.
November recap: Employment slides but unemployment holds at 4.3%
Employment unexpectedly fell by 21.3k in November against an anticipated rise of 20k, its weakest result in 9 months. This was driven by the largest decline in full-time employment since December 2023 (-56.5k), though that was moderated by a gain in part-time employment (35.2k).
Despite employment falling, the national unemployment rate remained steady at 4.3%. That was due to the participation rate declining from 66.9% to 66.7%, which equated to an estimated reduction to the labour force of 23.4k, broadly in line with the fall in employment. However, the broader underemployment rate increased from 5.8% to 6.2% on a flat month for hours worked. That saw total labour force underutilisation lift 0.4ppt to 10.5%, a rise consistent with the weak employment figure and an overall loosening of conditions in November.
As highlighted, hours worked stalled in November (0%) to ease from a modest rise in October (0.4%). That slowed the annual run-rate in hours worked from 2.1% to 1.2%. Over the past year, hours worked in the part-time segment at 4.5% have significantly outpaced the growth seen in the full-time segment (0.6%).
