Australia's unemployment shock: Jobless rate surges to 4.5 per cent as thousands of jobs vanish

Published: 02:58, 21 May 2026 | Updated: 03:28, 21 May 2026 Australia's unemployment rate has jumped to 4.5 per cent, surprising economists and adding to the case for the Reserve Bank to keep interest rates on hold. About 19,000 jobs dropped out of the economy in April, the Australian Bureau of Statistics reported on Thursday. Economists had expected the unemployment rate to hold at 4.3 per cent and an extra 15,000 jobs added to the economy in the month. The number of unemployed people rose by 33,000, ABS head of labour statistics Sean Crick said. 'Compared to what we usually see in April, more people remained unemployed this month,' he said Ahead of the release, IG market analyst Tony Sycamore said a resilient result in line with expectations would support the case for more Reserve Bank rate hikes, while an uptick in unemployment would see the rates market dial back expectations. Money markets had been pricing in about a 15 per cent of a hike at the next RBA meeting in June and were fully pricing in one rate rise by November. The participation rate fell 0.1 percentage points to 66.7 per cent. Australia's unemployment rate has jumped to 4.5 per cent, surprising economists and adding to the case for the Reserve Bank to keep interest rates on hold RBA governor Michele Bullock (pictured) and most of her board members still agreed fighting inflation was the priority, even though the risks to employment were gathering Minutes from the central bank's meeting earlier in May, released on Tuesday, showed most board members still agreed fighting inflation was the priority, even though the risks to economic activity and employment were gathering. Commonwealth Bank on Wednesday downgraded its economic growth forecast from 1.9 per cent to 1.6 per cent by the end of 2026 and upgraded its peak unemployment forecast from 4.4 per cent to 4.6 per cent. 'That leaves the RBA facing a difficult trade-off,' said CBA economists Belinda Allen, Ashwin Clarke and Harry Ottley in a research note. 'Inflation was already running too hot and will go higher from here. At the same time, growth is likely to slow over coming months, which should bring demand more into line with supply and gradually reduce price pressures.' Tasmania has Australia’s highest jobless rate at 5 per cent followed by Victoria at 4.8 per cent. New South Wales had a jobless rate of 4.5 per cent, in line with the national average while resource rich Western Australia had the lowest unemployment of 4.1 per cent, a touch lower than Queensland and South Australia on 4.2 per cent. The comments below have not been moderated. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.