Steep decline in employment figures boost | Australian Markets

A steep decline in employment figures over the previous month has raised prospects the Reserve Bank may cut charges as early as April, economists say.

Employment fell by 53,000 in February off the back of a spike in older staff quitting the workforce – towards expectations of 30,000 new jobs created, current Australian Bureau of Statistics (ABS) figures reveal.

Full-time employment fell by 35,700 in February and part-time jobs declined by 17,000.

However, a fall in jobs can typically imply good news for future price cuts, as a result of inflation is lowered by decreasing demand for employees, which results in decrease wages and in flip much less stress on costs.

Overall, the unemployment price held regular at 4.1 per cent, in line with market expectations.This was as a result of much less people eager to work in February in contrast with January.

Market Economic managing director Stephen Koukoulas mentioned the stunning fall in the quantity of Australians working must be a concern for the RBA.

“Employment dropped a net 22,300 in the first two months of 2025, the weakest first two months of a calendar year since 1991,” Mr Koukoulas wrote on X (previously Twitter).

“The RBA would be wise to cut to ensure things don’t get too much weaker. An interest-rate cut is necessary.”

Commonwealth Bank head of economics Gareth Aird mentioned Thursday’s jobs figures “completely blindsided forecasters”, with Australia’s employment growth now trying more sturdy than extraordinary.

“We don’t think the RBA will be swayed by today’s labour market data at the April Board meeting. That is, we still expect the Board to leave the cash rate on hold and resume normalising the cash rate in May with a 25bp rate decrease,” he mentioned.

“But at the margin it adds a little more weight to the ABS February monthly CPI indicator, due March 26.”

Mr Aird mentioned if inflation knowledge due in March comes in under RBA 0.7 per cent quarterly forecast “April 1 board meeting could shift to live.”

KPMG chief economist Brendan Rynne mentioned the massive drop in employment might be a signal households are getting on prime of their funds as more Aussies retired and the feminine participation price dropped.

“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 mentioned.

The RBA cut the money price for the primary time for the reason that covid pandemic in February dropping the money price from 4.35 to 4.1 per cent.

The bank’s new financial coverage board will meet on March 31 to April 1 however to date markets are predicting the subsequent price cut will come in May.