The unemployment rate has climbed to 4.2 per cent in July — its highest level since November 2021 — as Australia's economy continues to slow down.
Data from the Australian Bureau of Statistics showed more than 58,000 people found work last month, with the majority in full-time roles.
However, the number of unemployed people grew by 24,000 — lifting the participation rate to a record high of 67.1 per cent.
Despite the rise in the unemployment rate, the ABS's head of labour statistics, Kate Lamb, said the jobs market is still resilient.
"The unemployment rate rose to 4.2 per cent in July, with the number of unemployed growing by 24,000 people and employed by around 58,000. This combined increase lifted the participation rate to a record high of 67.1 per cent," she said.
"Although the unemployment rate increased by 0.1 percentage point in each of the past two months, the record high participation rate and near record high employment-to-population ratio shows that there continues to be a high number of people in jobs, and looking for and finding jobs.
"The employment and participation measures remain historically high while unemployment and underemployment measures remain historically low, compared with what we saw before the pandemic," she said.
Economists had broadly expected the unemployment rate to remain steady at 4.1 per cent in July, with around 20,000 new jobs added.
Adam Boyton, the head of Australian economics at ANZ, said he was not expecting the data to be as strong as it was.
"What was interesting today is the strength in jobs growth. Employment rose 58,000 in the month of July, [and] all of that was full-time jobs," he said.
"Yes, the unemployment rate did increase, but that reflected more people entering the labour market looking for work.
"There is a lot of demand for people out there ... but also the fact that the participation rate has hit a record high tells us that people are supplying that labour into the jobs market."
He said the ongoing strength in the labour market presented an interesting assessment about the health of the economy.
"We have had GDP growth running below trend for about a year, but ... jobs growth has run at 3.2 per cent over the past 12 months," Mr Boyton said.
"That's a strong rate of growth, and I guess what that tells us is that businesses are probably still feeling reasonably confident about the economic outlook."
Many job seekers, fewer roles
University student Hansen Zhao is counting down the days until he finishes his degree, and his search for a graduate position is already well underway.
The communications student has applied for plenty of roles in his ideal industry — in the media department of a sports organisation — but has had little success.
"I think the job market is getting competitive nowadays," he said.
"I have applied for office administrator, and got the feedback. It said [there were] over 160 applicants for that job. That's crazy."
According to Leigh Broderick, the head of market data at job advertising site Seek, Mr Zhao's struggles to find an entry-level role are widespread.
"Some hirers are attracting 300 to 400 applications in roles that are at the ... lower skilled end of the range," he said.
"Competition for those roles is very elevated. That unfortunately translates to a really tough environment for graduates right now."
However, that competitive jobs market extends well beyond graduates — the number of job advertisem*nts listed on Seek have fallen by more than 15 per cent over the past year.
On average, Mr Broderick said employers were seeing a surge of 60 per cent in applications for their roles, with some hirers receiving hundreds of applications for one or two positions.
"The number of opportunities is much less, and there are a lot of candidates looking for roles," he said.
"At the moment, the balance is towards the hirers. They have a lot more choice than they did a year or two ago.
"Unfortunately for candidates, it is quite hard to find roles at the moment because there's a lot of competition."
The jobs market is only set to get more competitive, with an additional 24,000 people joining the unemployment queue in July after hundreds of job losses at major companies.
Thousands of jobs were lost across Australia's mining sector in July, with up to 1,600 workers made redundant by BHP after the mining giant announced it would close its nickel operations by October.
Andrew Forrest's Fortescue also slashed 700 jobs in July in an attempt to streamline the company.
Last week, US-based lithium miner Albemarle confirmed 300 jobs would be lost from its Kemerton plant near Bunbury in Western Australia.
Core Lithium also cut 150 jobs after shutting its mine in Darwin in July — less than two years after it opened.
Another 600 workers lost their jobs when regional airline Rex collapsed late last month, while hundreds of workers were collectively laid off by Nine Entertainment, News Corp and Seven West Media in June.
The job losses also coincide with industries that are seeing a decline in advertised roles on Seek over the past year, with positions in technology, engineering, marketing, hospitality and mining falling by as much as 25 per cent.
Despite the increased competition, Adam Boyton from ANZ said the jobs data showed some reasons to be optimistic.
"Importantly, the economy is still creating jobs," he said.
"So there are jobs out there. It just might take a little longer to find them."
Where to for the RBA and interest rates?
The RBA's latest forecasts expect the unemployment will rise to 4.3 per cent by the end of the year — and Mr Boyton said Thursday's jobs data is consistent with that outlook.
"My expectation is that the rate of jobs growth will slow," he said.
"I don't think we'll see outright falls in employment, but I do think the pace of jobs growth will slow as we move through the rest of the year and into next year.
"I think we are getting very close to the point where the Reserve Bank can start to view the labour market as being a bit more balanced and not running red hot.
"Yes, jobs growth is still very strong, but the economy is supplying more and more people into the labour market.
"I think over time, that additional supply should put a bit of downward pressure on inflation, and the RBA should be able to cut rates in early 2025."
Mr Boyton believes the unemployment rate will peak in the middle of next year, given the time it takes for changes in economic activity to flow through to the labour market.
"Both the labour market and also inflation tend to be backward looking economic indicators," he said.
"I suspect if we have this conversation in six months' time, we won't be talking about a jobs market where employment growth is quiet as strong as it certainly seems now."
Despite the delays, Mr Boyton is confident the Australian economy is on track to reach a turning point sooner rather than later.
"I think we've probably moving through the worst, as far as the economy is concerned," he said.
"But look, overall, I think you'd have to say the Australian economy has managed to weather the shocks of inflation and also higher interest rates fairly well over the past 12 months."
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