Australia’s unemployment rate rose to 4.6% in August, as employment growth was driven entirely by part-time jobs while full-time employment declined, according to the latest Australian Bureau of Statistics (ABS) data.
The number of employed people increased by 39,500 to 14,836,600, while unemployment rose by 28,200 to 722,900. The unemployment rate was up 0.2 percentage points from July and 0.4 points from August 2025.
“This month there was 39,000 more people in employment, and 28,000 more people in unemployment,” said Sean Crick, head of labour statistics at the ABS.
Part-time work drives employment growth
Part-time employment increased by 45,800 to 4,642,600 in August. This more than offset a 6,300 decline in full-time employment, which fell to 10,193,900.
The participation rate also rose by 0.2 percentage points to 67.1%, as more people entered the labour force and began looking for work.
“This August we recorded a higher proportion of people who were previously not in the labour force moving to being unemployed, compared to recent years,” Crick said.
The increase in participation alongside rising unemployment suggests that more people are entering the labour market without immediately finding work.
Hours worked rebound
Total hours worked increased by 0.7% to 2,009 million hours in August, reversing the 14 million-hour decline recorded in July.
“Hours worked rose by 14 million hours in August after falling by the same amount in July. This is partly due to having more employed people working zero hours last month compared to usual July months,” Crick said.
Despite the increase in unemployment, the underemployment rate edged down by 0.1 percentage points to 6.2%. The underutilisation rate, which combines unemployment and underemployment, remained unchanged at 10.8%.
Youth unemployment reaches 10.8%
Younger workers faced a sharper rise in unemployment during the month. The youth unemployment rate increased by 0.4 percentage points to 10.8%.
The unemployment rate for men rose to 4.8%, while the rate for women remained at 4.4%.
Victoria recorded the highest seasonally adjusted unemployment rate among the states at 5.2%, followed by Tasmania at 5.0%. New South Wales recorded the lowest at 4.3%.
South Australia recorded the largest monthly increase, with its unemployment rate rising 0.5 percentage points to 4.6%. Queensland’s rate increased by 0.3 points to 4.5%.
Unemployment grows faster than employment
Over the year to August, the number of unemployed Australians increased by 80,000, or 12.4%, while employment grew by 1.6%.
The ABS has cautioned against interpreting monthly movements in isolation after introducing a new Supplementary Survey collection model. The change removes a historical adjustment applied to February and August data and may have a small effect on August’s seasonally adjusted estimates.
The bureau said the data remains fit for purpose, while continuing to recommend trend measures as the preferred indicator of underlying labour market conditions.
On a trend basis, unemployment edged up to 4.6%, employment increased by 0.2% and hours worked remained unchanged.
Read more: Australia's unemployment rate holds at 4.4% as 76,000 jobs added
Pressure remains on employers
James Keene, managing director, APAC at Employment Hero, said the data highlights "resilience" despite external pressures on businesses.
"Small business owners are fighting to keep growing where demand allows. Business owners that we speak to day in day out add critical nuance - operating margins are still tightly squeezed by ongoing wage inflation and the threat of further RBA rate hikes threatens to pull the handbrake on consumer demand just as momentum builds,” Keene further noted.
"What businesses need now is certainty - on rates, on wages policy, and on the cost pressures that continue to chip away at their ability to grow and hire,”Keene concluded.
The latest figures come as employers continue to navigate wage pressures, operating costs and uncertainty around interest rates.
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