Australian unemployment rate remains steady as labour market shows signs of a slowdown
The number of those in full-time employment decreased while part-time work increased in December
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The unemployment rate remained at 3.9 percent in December, indicating a continuing tight labour market that was now starting to slow, according to the Australian Bureau of Statistics (ABS). In seasonally adjusted terms, employment decreased by 65,000 people overall to 14,201,100. Full-time employment fell by 106,600 to 9,791,200 people. Part-time employment increased by 41,400 to 4,409,900 people.
“The strength in employment in October and November and the fall in December reflected changes in the timing of employment growth in the last few months of 2023, compared with earlier years,” said David Taylor, ABS head of labour statistics.
Gareth Aird, CBA head of Australian economics, said this reflected the adoption of Black Friday sales events in the Australian retail sector, which had shifted long-term hiring and spending patterns.
“The growing popularity of Black Friday sales has now meant a lot more hiring is done in the month of November rather than December,” Mr Aird said. “This is a recent phenomenon.”
The employment-to-population ratio and participation rate both hit record highs in November. Both measures slipped by 0.4 percent in December. The employment-to-population ratio fell to 64.2 percent and the participation rate fell to 66.8 percent.Underemployment – which measures the portion of workers who would like to work more hours if they could – remained at 6.5 percent.
Mr Taylor said: “In trend terms, many of the key indicators still point to a tight labour market. However, the increasing unemployment rate since November 2022, along with the rising underemployment rate and slowdown in the growth of employment and hours worked, suggest that the labour market is starting to slow.”
In November 2022, the seasonally adjusted unemployment rate was 3.5 percent. Mr Aird said the increase since then to 3.9 percent today indicated the labour market was loosening.“Other indicators of the labour market also capture its loosening,” he said. “Jobs growth over the past six months has all been in the part-time space. Seek jobs ads in December … were down by 17.4 percent over the year. And the number of applicants per job ad continued to march higher in November. Applicants per job ad were up by 81.1 percent over the year to November.”
Movements in the unemployment rate are a key factor considered by the Reserve Bank board when making interest rate decisions. The next decision will be announced on 6 February. Mr Aird said CBA expected the unemployment rate to gradually lift over 2024 to end the year at 4.5 percent. “We believe RBA rate cuts will be required this year to prevent the unemployment rate from rising much above 4.5 percent. Our base case sees the RBA commence an easing cycle in September.”
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For self-employed Australians, navigating the mortgage market can be complex—especially when income documentation doesn’t fit the standard mould. In this guide, Stephen Andrianakos, Director of Red Door Financial Group, outlines eight flexible loan structures designed to support business owners, freelancers, and entrepreneurs.
1. Full-Doc Loan
A full-doc loan is the most straightforward and competitive option for self-employed borrowers with up-to-date tax returns and financials. Lenders assess two years of tax returns, assessment notices, and business financials. This type of loan offers high borrowing capacity, access to features like offset accounts and redraw facilities, and fixed and variable rate choices.
2. Low-Doc Loan
Low-doc loans are designed for borrowers who can’t provide the usual financial documentation, such as those in start-up mode or recently expanded businesses. Instead of full tax returns, lenders accept alternatives like profit and loss statements or accountant’s declarations. While rates may be slightly higher, these loans make finance accessible where banks might otherwise decline.
3. Standard Variable Rate Loan
A standard variable loan moves with the market and offers flexibility in repayments, extra contributions, and redraw options. It’s ideal for borrowers who want to manage repayments actively or pay off their loans faster when income permits. With access to over 40 lenders, brokers can help match borrowers with a variable product suited to their financial strategy.
4. Fixed Rate Loan
A fixed-rate loan offers repayment certainty over a set term—typically one to five years. It’s popular with borrowers seeking predictability, especially in volatile rate environments. While fixed loans offer fewer flexible features, their stability can be valuable for budgeting and cash flow planning.
5. Split Loan
A split loan combines fixed and variable portions, giving borrowers the security of a fixed rate on part of the loan and the flexibility of a variable rate on the other. This structure benefits self-employed clients with irregular income, allowing them to lock in part of their repayment while keeping some funds accessible.
6. Construction Loan
Construction loans release funds in stages aligned with the building process, from the initial slab to completion. These loans suit clients building a new home or undertaking major renovations. Most lenders offer interest-only repayments during construction, switching to principal-and-interest after the build. Managing timelines and approvals is key to a smooth experience.
7. Interest-Only Loan
Interest-only loans allow borrowers to pay just the interest portion of the loan for a set period, preserving cash flow. This structure is often used during growth phases in business or for investment purposes. After the interest-only period, the loan typically converts to principal-and-interest repayments.
8. Offset Home Loan
An offset home loan links your savings account to your mortgage, reducing the interest charged on the loan. For self-employed borrowers with fluctuating income, it’s a valuable tool for managing cash flow while still reducing interest and accelerating loan repayment. The funds remain accessible, offering both flexibility and efficiency.
Red Door Financial Group is a Melbourne-based brokerage firm that offers personalised financial solutions for residential, commercial, and business lending.
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