Unemployment holds at 4.1% as January labour market sends mixed signals

Australia's unemployment rate remained steady at 4.1% in January, according to new data from the Australian Bureau of Statistics (ABS), as the labour market continues to show resilience despite cost-of-living pressure and a more restrictive interest-rate environment.

The ABS said employment increased to 14,703,800 people in seasonally adjusted terms. Beneath the headline, the month produced a familiar push-pull: full-time employment rose by 50,500, partly offset by a fall of 32,700 in part-time employment. The participation rate held at 66.7%, while the employment-to-population ratio eased to 63.9%.

The underemployment rate increased to 5.9%, a reminder that the labour market's strength is not captured solely by the unemployment figure. Underemployment can rise when more people are employed but want additional hours-often reflecting patchy hours in services and retail, or the shift between part-time and full-time roles.

Economists and market watchers will read the release in the context of inflation and wages, where households remain sensitive to changes in living costs and borrowing rates. A steady unemployment rate can indicate ongoing demand for labour, but the tilt toward full-time work and the lift in underemployment complicate the story: it can signal both improved job quality for some and reduced hours for others.

The ABS framed the update as a stable headline outcome, with its head of labour statistics quoted in the media release noting the jobless rate "remained steady". The next data points-hours worked, vacancies, and wage trends-will help show whether the economy is cooling in an orderly way or accumulating pressure in pockets of the workforce