Surprising fall in the number of Australians working

A surprising dip in the number of employed Australians adds to the case for back-to-back rate cuts.

The number of Australians in work has fallen after two strong months of gains, with experts saying it is unlikely to sway the RBA at its next meeting.

National unemployment figures released by the Australian Bureau of Statistics shows 2,500 less Australians were in a job in May compared with April, with the unemployment rate remaining at 4.1 per cent.

According to the national figures after the May monthly change 14,620,600 Australians are in a job.

This follows a surprise uplift in the number of Australians working in April when 89,000 Aussies joined the workforce.

Australians are still likely to get a rate cut in July. Picture: NewsWire / John Appleyard

Despite the fall in the number of Australians working, the official unemployment rate of 4.1 per cent still beats RBA projections of umemploymnet rising to 4.3 per cent over the year.

BDO economics partner Anders Magnusson said todays unemployment rate came in a little lower than the RBA’s forecast, but won’t sway them on a July rate cut.

Ahead of the jobs figures, the bond markets had already added around an 83 per cent chance that the RBA would deliver back-to-back rate cuts at its July meeting.

It already lowered the official cash rate twice in 2025 by a quarter percentage point at its May and February meetings.

“While a small amount of employment was lost in May, a decrease in the participation rate kept the unemployment rate stable. This doesn’t change the strong case for a 25 basis point cash rate cut in July,” he said.

Oxford Economics Australia economist Kar Chong Low said he expects Australia’s strong unemployment rate to fade over the next 12-months.

“Global uncertainty is clouding business decisions and prompting many firms to temper hiring plans,” he said.

“To be clear, we don’t expect a sharp uptick in lay-offs.

“Instead, slower hiring will see employment growth fall behind the number of people looking for work – pushing the unemployment rate to 4.5% by the end of the year.”

The number of Australians employed fell for the month of May. Picture: NewsWire / John Appleyard

ABS head of labour statistics Sean Crick said the number of Australians wanting a job also fell in the month of May.

“Despite the slight fall in the employment-to-population ratio this month, the female employment-to-population ratio rose 0.1 percentage points to a record high of 60.9 per cent,” Mr. Crick said.

At the same time the number of hours Australians are working is on the rise and is now up by 0.1 per cent since the start of the year.

“Hours worked increased 1.3 per cent in May, following lower levels in the previous two months coinciding with the Easter holiday period and severe weather disruptions,” Mr Crick said.