Australia's Employment Remains Strong, Supporting the RBA's Hawkish Stance

MaticHoleFiller · 2026-03-21T13:58:16+00:00

Australia's unemployment rate rose to 4.3% in February, with employment increasing by 48,900 people. Despite the unemployment rate being higher than expected, the economy remains robust, and the central bank has raised rates to address inflationary pressures, with market views divided on another rate hike in May.

MaticHoleFiller

2026-03-21 13:58:16

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Australia’s unemployment rate remained relatively low in February, with continued job growth further confirming the Reserve Bank of Australia’s view: the economy remains resilient enough to withstand tighter monetary policy.

Data released by the Australian Bureau of Statistics on Thursday showed employment increased by 48,900 jobs, all driven by part-time positions. As the number of job seekers rose, the unemployment rate increased to 4.3%, above the expected 4.1%.

Two days before this data was released, the Reserve Bank of Australia (RBA) raised interest rates for the second consecutive time and noted that even before the outbreak of the Iran war, inflationary pressures had already been significant across various sectors of the Australian economy. RBA policymakers are trying to bring inflation back to the 2%-3% target range while maintaining a healthy labor market. This balancing strategy still appears appropriate to the country’s central bank.

Economists and traders are divided on whether the RBA will raise interest rates again in May, and it remains uncertain if the bank will wait longer to observe the impact of the Iran war. Market pricing indicates about a 70% chance of a rate hike in May.

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