Jobs Fell 39,300 in September. Why I Think the RBA Holds Now and Hikes Later
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Australia lost 39,300 jobs in September 2026 and the unemployment rate stayed at 4.7%, its highest level in this cycle. A year ago it was 4.4%. Three weeks earlier, on 29 September, the Reserve Bank had raised the cash rate to 4.60%.
My read, using only ABS and RBA figures: the RBA will hold at 4.60% on 3 November, because the job market is already weaker than the RBA forecast. But inflation is also higher than it forecast, and the Board has said it is willing to accept slower jobs growth to fix that. So I expect one more rise is a real chance in December or February 2027, depending on the inflation numbers.
Jobs and rates in short
- Unemployment rate
- 4.7% in September 2026 (trend 4.6%). It was 4.4% a year earlier.
- Jobs
- −39,300 in the month, but still +168,300 (1.2%) over the year
- People out of work
- 732,000, up 55,200 (8.2%) in a year
- Spare capacity
- Underutilisation 11.0%: about one in nine workers is unemployed or wants more hours. Participation fell to 66.8%.
- Inflation
- CPI 4.0% and trimmed mean 3.6% in the year to August 2026. Target: 2–3%.
- Cash rate
- 4.60% since 30 September 2026, after four rises this year (February, March, May, September)
- Next decisions
- 3 November and 8 December 2026, then 9 February 2027
- My call
- Hold in November. Another 0.25-point rise in December or February if inflation stays near 3.6%.
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What happened to Australian jobs in September 2026?
The ABS released the September Labour Force figures on 15 October. The participation rate, the share of adults working or looking for work, fell 0.2 points to 66.8%. When people stop looking, they drop out of the unemployment count, so the 4.7% headline flatters the picture a little. August was also revised up from 4.6% to 4.7%.
One bad month on its own isn’t a trend. The chart shows how noisy the monthly numbers are: employment also fell by about 42,000 in November 2025 and 41,000 in April 2026, and bounced back each time. What has changed is the direction underneath. Over the past year 168,300 more people found work, but 55,200 more people are now unemployed.
Monthly change in employed people, seasonally adjusted, worked out from ABS employment levels. Source: ABS Labour Force, Australia, September 2026.
Is the Australian job market cracking?
The ABS itself says to lean on the trend series this month. It changed how part of the survey is collected, and the group of households that rotated into the sample in September had an unemployment rate of 4.6%, against 3.5% for the group that rotated out in August. Part of the jump may be who was asked, not what happened.
Unemployment rate, seasonally adjusted and trend, with the RBA’s August forecast for the December quarter 2026. Sources: ABS Labour Force, September 2026; RBA Statement on Monetary Policy, August 2026.
Other signs point the same way. Underemployment, people with a job who want more hours, is 6.3%, up from 5.9% a year ago. Hours worked rose just 0.1% in the month. Employers seem to be stretching the staff they have rather than hiring. Here in Queensland, unemployment was 4.5% and underemployment 6.8%. New South Wales had the weakest month, with jobs down 0.8%.
Illustration generated with Qwen Image 2.1
What does a cooling job market mean for the economy?
The RBA’s August forecasts already had GDP growth slowing from 1.9% to 1.4% by December 2026, and real wages, pay after inflation, still going backwards by 0.2% over the year. That is the squeeze many families feel: pay rises that don’t quite cover the bills.
The uncomfortable part is that the RBA wants some of this. Its September minutes say growth in consumption “would need to be subdued for some time if inflation was to return to target”. A softer job market is, in the RBA’s eyes, part of how inflation comes down.
Why is inflation still the RBA’s bigger worry?
Headline inflation was 4.0% in the year to August 2026. Housing was the largest contributor at 5.7%, driven by electricity and new home prices (up 5.4% as builders passed on higher costs). Transport rose 5.6% because of fuel. Prices of non-tradables, mostly local services and housing that imports can’t undercut, rose 4.5%. Those are the prices interest rates are meant to cool.
Annual inflation, all groups CPI and trimmed mean, monthly. The shaded band is the RBA’s 2–3% target. Sources: ABS Consumer Price Index, August 2026; RBA Statement on Monetary Policy, August 2026.
There was one good sign. The trimmed mean rose only 0.2% in the month of August, a pace that would sit inside the target band if it lasted a year. One month is not enough. The RBA needs to see it hold, and the next test comes on 28 October.
Will the RBA raise rates on 3 November 2026?
- Jobs are already weaker than the RBA planned. In August it forecast unemployment of 4.5% for the December quarter. September is at 4.7% (trend 4.6%), with three months still to go.
- The last rise is barely three weeks old. Rates take months to work through mortgages and spending. Raising again on 3 November, before seeing any effect of the 30 September rise, would be unusual.
- The latest inflation month was softer. A 0.2% monthly trimmed mean in August gives the Board a reason to wait for the full September quarter figures.
RBA cash rate target since January 2025, with the next three Board decision dates. Source: RBA cash rate target; RBA Board meeting schedule.
The one thing that could flip this is the September quarter CPI on 28 October. If the trimmed mean jumps well above 3.6%, a November rise is back on the table. I don’t expect it, but I wouldn’t rule it out.
Why could rates still rise in December or early 2027?
Latest outcome against the RBA’s August forecast for the December quarter 2026. Unemployment is above forecast (weaker economy), and so is underlying inflation (stickier prices). Sources: ABS; RBA Statement on Monetary Policy, August 2026.
Read the September minutes and the message is blunt. The Board said the August forecasts “required a number of favourable developments” and “it no longer appeared likely all of these would eventuate”. It added that bringing inflation down amid repeated supply shocks “would require accepting slower growth in demand and employment than would otherwise be the case”.
In plain words: the RBA expected unemployment to rise. A 4.7% jobless rate is uncomfortable, but it isn’t the kind of shock that makes the Board stop. Its statement keeps the door open to “increasing the cash rate target further if needed”.
That is why I think the next rise, if it comes, lands at the 8 December meeting or the 9 February 2027 meeting. February matters most: by then the Board will have the December quarter inflation figures and fresh forecasts. If the trimmed mean is still around 3.5% or higher, I expect a rise to 4.85%.
Illustration generated with Qwen Image 2.1
What would change my mind?
| Scenario | What would have to happen | How likely, my view |
|---|---|---|
| Hold in November | September quarter trimmed mean at or a little below 3.6%; unemployment around 4.6–4.8% | Most likely |
| Rise in December or February | Trimmed mean stuck at 3.5% or higher through to the December quarter, with fuel and electricity still pushing prices up | A real chance |
| Rise in November | A hot September quarter CPI on 28 October, well above 3.6% trimmed mean | Possible, not my base case |
| A cut | Unemployment heading to 5% or more and the trimmed mean falling back inside 2–3% | Unlikely before late 2027 |
These are my own judgements from the published data, not RBA guidance.
Which dates should you watch?
- 28 October 2026: CPI for September, with the September quarter trimmed mean (ABS)
- 3 November 2026: RBA decision and new forecasts
- 19 November 2026: October jobs figures (ABS)
- 25 November 2026: CPI for October (ABS)
- 8 December 2026: RBA decision
- 17 December 2026: November jobs figures (ABS)
- 9 February 2027: RBA decision, after the December quarter CPI
What does this mean for my mortgage?
If you have a variable loan, test your budget at a rate 0.25 points higher than today. My September rate rise explainer works through what each rise costs on a typical mortgage, and wages vs inflation shows why pay packets have felt tight since 2019.
Show the monthly numbers behind the charts
| Month | Unemployment (SA) | Unemployment (trend) | Jobs change (SA) | CPI, annual | Trimmed mean, annual |
|---|---|---|---|---|---|
| Sep 26 | 4.7% | 4.6% | -39.3k | – | – |
| Aug 26 | 4.7% | 4.6% | +29.3k | 4.0% | 3.6% |
| Jul 26 | 4.5% | 4.6% | -17.1k | 3.5% | 3.6% |
| Jun 26 | 4.4% | 4.5% | +76.4k | 3.8% | 3.6% |
| May 26 | 4.4% | 4.4% | +34.9k | 4.0% | 3.5% |
| Apr 26 | 4.5% | 4.4% | -41.2k | 4.2% | 3.4% |
| Mar 26 | 4.3% | 4.3% | +21.2k | 4.6% | 3.3% |
| Feb 26 | 4.3% | 4.3% | +22.4k | 3.7% | 3.3% |
| Jan 26 | 4.1% | 4.3% | +33.6k | 3.8% | 3.3% |
| Dec 25 | 4.1% | 4.3% | +57.3k | 3.8% | 3.3% |
| Nov 25 | 4.3% | 4.3% | -42.1k | 3.4% | 3.2% |
| Oct 25 | 4.3% | 4.3% | +33.0k | 3.8% | 3.3% |
| Sep 25 | 4.4% | 4.3% | – | 3.6% | 3.2% |
Sources: ABS Labour Force, Australia, September 2026; ABS Consumer Price Index, Australia, August 2026. September CPI is released on 28 October.
Common questions
What is Australia’s unemployment rate in September 2026?
4.7% seasonally adjusted, the same as a revised August, and 4.6% in trend terms. Employment fell by 39,300 in the month (ABS, released 15 October 2026).
Will the RBA raise interest rates in November 2026?
I expect a hold at 4.60% on 3 November. Unemployment is already above the RBA’s forecast and the last rise was on 30 September. A hot September quarter CPI on 28 October is the main risk to that view.
Will interest rates go up again in 2026 or 2027?
Possibly. Trimmed mean inflation is 3.6% against an RBA forecast of 3.3% for December 2026, and the Board has said it will raise the cash rate further if needed. I see 8 December or 9 February 2027 as the likeliest timing for one more 0.25-point rise.
Why doesn’t rising unemployment stop the RBA hiking?
Because the RBA expected it. Its September minutes say fighting inflation amid repeated supply shocks requires accepting slower growth in demand and employment. It would take a much sharper rise in unemployment to change that.
Can I trust the September jobs figure?
Treat it with care. The ABS changed part of its survey method and says the trend series is the better guide this month. The trend shows a slow rise in unemployment, from 4.3% to 4.6% over a year.
When is the next RBA meeting?
The Monetary Policy Board meets on 2–3 November 2026 and announces its decision on 3 November. The next meetings are 7–8 December 2026 and 8–9 February 2027.
Sources
- ABS · Labour Force, Australia, September 2026
- ABS · Unemployment rate at 4.7% in September
- ABS · Consumer Price Index, Australia, August 2026
- ABS · CPI rose 4.0% in the year to August 2026
- RBA · Cash Rate Target
- RBA · Statement by the Monetary Policy Board
- RBA · Minutes of the Monetary Policy Board Meeting, 29 September 2026
- RBA · Statement on Monetary Policy, August 2026: Outlook
- RBA · Board Meeting Schedules
General information only, not financial advice. Research was AI-assisted; every figure was checked against ABS and RBA publications on 16 October 2026. The views on future rates are my own.
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Series: Australian Economy 2026 (part 11 of 11)系列：2026 澳洲經濟（第 11 / 11 篇）
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