Cyclones, President Trump’s surprising impact on Aussie workers

Thursday’s unemployment figures showed a spike in Aussies finding a job, but it might not be a boom in the Australian economy.

More Australians are back in the workforce in March, correcting a major fall in employment at the start of the year.

Fresh figures released by the Australian Bureau of Statistics showed 32,000 more Australians found work in March.

Overall Australia’s unemployment rate rose to 4.1 per cent, beating forecasts of unemployment rising to 4.2 per cent.

Oxford Economics head of macroeconomic forecasting Sean Langcake said hiring decisions had been impacted by fears of the US President Donald Trump’s tariff policy.

“The enormous economic uncertainty generated by erratic changes to US trade policy will weigh heavily on firms’ investment and hiring decisions.”

“Employment growth will slow, and now expect the unemployment rate will climb a little higher over 2025.”

Mr Lancake said the Australian economy is fortunate to be entering this episode in a strong position.

During the month of March, tariffs on steel and aluminium imports were implemented, as well as individual tariffs on Mexico, Canada and China.

In April individual tariffs were placed on most trading countries, which were subsequently paused for 90 days. There is currently a blanket 10 per cent rate on all countries, including Australia, while China is facing a 145 per cent tariff.

ABS head of labour statistics Sean Crick, said while there were more jobs created, 3,000 people lost their job in March.

“Employment has grown by 308,000 people, or 2.2 per cent, over the last 12 months,” he said.

“This annual growth rate is slightly higher than the 20-year pre-pandemic average of 2.0 per cent.”

The employment-to-population ratio remained at 64.1 per cent in March, while the participation rate increased slightly to 66.8 per cent.

More Australians are heading back into the workforce. Picture: NewsWire / John Appleyard

But the number of hours worked decreased by 0.3 per cent, falling for the second month in a row, despite the growth in employment this month.

Much of this has been put down to extreme weather conditions such as ex-Tropical Cyclone Alfred, which saw businesses close and Australians not go to work.

BDO economics partner Anders Magnusson said today’s decision is unlikely to influence the RBA’s next cash rate decision.

“I think a cut in May is slightly more likely than a hold, but a surprise in the forthcoming quarterly CPI release could change that.”

Mr Magnusson said the recent budget has some elements in it to help Australian workers.

“On a more optimistic note, the recent budget proposal to abolish non-compete clauses for some workers should improve matching of workers to their most productive job. Improved matching would enhance productivity and stimulate economic growth, though the changes are a couple of years away,” Mr Magnusson said.

The labour force data was the most important piece of domestic data released today, which so far has proven resilient despite cost of living pressures.

While more Australians found a job in the last month, it comes off the back of a surprising fall in employment over February, as a spike of older Australians and females left the workforce.

KPMG chief economist Brendan Rynne said at the time the large drop in employment was due to more Aussies retiring as well as a fall in the female participation rate.

“It is possible that a combination of the stage 3 tax cuts, the February interest rate cut and some wages growth in partner incomes have done enough to ease household budgets and pull them back from looking for work,” Mr Rynne said.