Australia Sheds 39,300 Jobs in September as Unemployment Climbs to 4.7%

Australia's labor market deteriorated sharply in September, with total employment falling 39,300, badly missing forecasts for a 20,000 gain and reversing the prior month's 39,500 rise. The unemployment rate ticked up to 4.7%, above both the 4.6% forecast and the 4.6% reading from August, while the participation rate slipped to 66.8% against a 67.0% forecast and a prior 67.1%.

The headline weakness was driven entirely by a collapse in part-time work, which shed 73,700 positions after adding 45,800 the month before. Full-time employment, by contrast, rose 42,400, recovering from a prior decline of 6,300, suggesting the underlying quality of employment held up even as the total count fell.

The data lands at a sensitive moment for the Reserve Bank of Australia, which had been maintaining a tight policy stance amid expectations that strong labor figures could prompt another rate hike later this year. The broad miss across headline employment, unemployment rate, and participation rate complicates that case and is likely to temper near-term rate hike expectations.