About 39,300 fewer Australians had a job in September, and the unemployment rate is sitting at its highest level since late 2021. Markets quickly cut the odds of another cash-rate rise on Melbourne Cup Day. Economists are still split, and the Reserve Bank has one more big inflation print to come before it decides. Here's what the figures show, why the RBA cares, what the experts expect for 3 November, and what you can do with your home loan now.
The short version
- Unemployment stayed at 4.7% in September after August was revised up to 4.7% — a five-year high in seasonally adjusted terms (ABS, 15 October 2026).
- Employment fell 39,300 (−0.3%) to 14,782,700. Full-time rose 34,400; part-time fell 73,700.
- Participation slipped to 66.8%; underemployment 6.3%; underutilisation 11.0%; youth unemployment 11.1%.
- Markets now see less than a one-in-five chance of a rise on Tuesday 3 November (cash rate still 4.60%).
- Next big number: September-quarter CPI on Wednesday 28 October. RBA decision: 2:00pm Adelaide time, Tuesday 3 November.
What the ABS figures show
The Australian Bureau of Statistics released the September Labour Force survey yesterday (Thursday 15 October). In seasonally adjusted terms:
- Unemployment: 4.7%. August was revised up to 4.7% as well. The ABS reports a 0.1-point rise on unrounded figures, which is why some headlines say the rate “increased” even though both months round to 4.7%. Unemployed people rose by 8,900 to 732,000.
- Employment: down 39,300 (−0.3%) to 14,782,700 people. That fall was driven by part-time work: full-time employment rose 34,400, while part-time fell 73,700.
- Participation: the participation rate fell 0.2 points to 66.8%. The employment-to-population ratio fell 0.3 points to 63.6%.
- Underemployment and underutilisation: underemployment rose 0.1 point to 6.3%; underutilisation (unemployment plus underemployment) rose 0.2 points to 11.0%. Youth unemployment was 11.1%.
The ABS's preferred steadier measure — the trend unemployment rate — was unchanged at 4.6%. The Bureau recommends caution with short-term moves; month-to-month noise can be large. Still, the seasonally adjusted rate has climbed through 2026 from about 4.1% in January to 4.7% now. The Conversation notes the last higher reading was October 2021 (5.2% in the ABS series), which is why this is widely described as a five-year high.
Until recently, rising unemployment could be partly explained by more people looking for work. September was different: employment itself fell, and fewer people were in the labour force. That is a clearer cooling signal than a rise driven only by participation.
South Australia's read
National framing matters most for the RBA, but the state picture is worth a line. In South Australia, seasonally adjusted unemployment was 4.2% (down 0.5 points), with employment up 0.2% to 991,300. That puts SA equal-lowest with Western Australia at 4.2%; Victoria was the highest at 5.1% (ABS state labour force tables). Soft national jobs data does not mean every state is moving the same way — but the Board sets one cash rate for the country.
Why the Reserve Bank cares
The RBA has a dual mandate: keep inflation between 2% and 3% over time, and support full employment. Higher unemployment can ease wage and price pressure, which is why jobs figures sit beside inflation in every rate debate.
Governor Michele Bullock said last month that unemployment might need to rise to somewhere between 4.5% and 5% to ease pressure on inflation. Seasonally adjusted unemployment is now inside that range. Separately, ABC News notes the September-quarter average unemployment rate was about 4.63% — already above the RBA's 4.5% forecast for the December quarter in its August Statement on Monetary Policy.
The cash rate target is still 4.60%, effective 30 September 2026, after four rises this year from 3.60% in December 2025 (RBA cash rate target overview). The next update is 2:30pm AEDT (2:00pm Adelaide time) on Tuesday 3 November. We covered the Board's September tone in our 14 October minutes article, and the broader November setup — including jobs as one of the three data releases that would shape the decision — in our 12 October November outlook. Yesterday's release is the jobs piece of that puzzle.
What markets and economists expect for 3 November
After the release, market odds of a rise on Melbourne Cup Day fell sharply. The Conversation, citing market pricing, put the chance at about 18% (down from around 30%). ActionForex, citing Bloomberg pricing, reported a move from about 35% before the release to below 20% after. The safest plain-English read: markets now see less than a one-in-five chance of a hike. That is not the same as “off the table”.
Economists remain split. From ABC News reporting on 15 October:
| Economist / house | November call | Note |
|---|---|---|
| CBA (Ashwin Clarke) | Hold | “Meeting is live”; risks tilted to the upside |
| Westpac | Rise | Still expects a November hike |
| JP Morgan (Tom Kennedy) | Hold from here | Jobless rate up 0.6 pts since February — largest nine-month rise in more than a decade outside COVID |
| EY (Paula Gadsby) | At least one more rise | “Potentially as soon as Melbourne Cup Day” |
| BetaShares (David Bassanese) | Rise in November | Hinges on the “all-important” inflation reading later this month |
| Oxford Economics (Oscar Guth) | Unemployment keeps rising | Above 4.8% late in 2027 (path, not a November call) |
Calls attributed to the economists named, as reported by ABC News on 15 October 2026. Forecasts can change. Not Loanworth predictions.
So: markets have pulled back, several banks still expect a rise, and almost everyone is waiting on inflation. Lower odds is not the same as no rise.
What it means for your home loan
Budget as if another 0.25% could still come
Treat a hold as a bonus, not a base case you must rely on. In our 12 October article we showed what another full 0.25-point pass-on would add on a 30-year principal-and-interest example moving from 6.24% to 6.49%: about $82 a month on a $500,000 loan, or about $98 on $600,000 (Loanworth calculation, rounded, example only). Your actual change depends on your lender, your rate, your remaining term and whether you pay interest only.
Wait for the CPI on Wednesday 28 October before rushing a fix-or-float call
Jobs matter. Inflation still matters more for many November calls. Unless a fixed rate already works for your budget and risk tolerance, there is usually little reason to lock in solely because of yesterday's jobs print. Compare the fixed offer with your variable rate, check break costs, and check any limits on extra repayments or offset before you decide. Our 6 October fixed-rates article explains why fixed pricing does not always move one-for-one with the cash rate.
Fixed rates can ease when hike odds fall — compare, don't assume
Fixed rates are priced off market expectations as well as funding costs. Softer November odds can flow into fixed pricing, but lenders move at different speeds. Shop the number in front of you rather than assuming every lender has cut.
If your job feels less certain, build the buffer now
Extra money in an offset or redraw, a realistic budget, and knowing what your loan contract allows (redraw, repayment holidays, hardship processes) helps if income changes. The RBA's October Financial Stability Review still found most mortgage holders coping; see our 7 October FSR wrap. Buffers are still the practical defence.
If you're struggling, talk to your lender early
Lenders must consider hardship requests. Calling before you miss a repayment usually gives you more options than waiting until arrears build. The free National Debt Helpline on 1800 007 007 is a good independent next step. This is general information only — outcomes depend on your lender and your situation.
If you're buying or refinancing
Lenders assess income stability. Casual, contract or recently changed jobs often need more paperwork and can slow an assessment. Get pre-approval sorted before you commit to an auction or an unconditional contract, and ask for it to be rechecked if rates or your income have moved since it was issued.
Key dates
- Wednesday 28 October — September-quarter Consumer Price Index (ABS).
- Tuesday 3 November, 2:00pm Adelaide time (2:30pm AEDT) — RBA Monetary Policy Board decision.
- Thursday 19 November — next ABS Labour Force release (October figures).
Related reading
- Is another rate rise in November already locked in? (12 October)
- The RBA's minutes are out: what the Board said about more rate rises (14 October)
- Fixed rates are rising faster than the cash rate (6 October)
- Most mortgage holders are still coping. Here's what the RBA's October Financial Stability Review says (7 October)
Wondering how the next RBA decision could affect your loan?
Book a no-obligation chat and we'll run the numbers with you — what another 0.25% would mean on your repayment, whether your buffer is realistic, and whether your current loan still stacks up. We'll start with general information, and if you want personal recommendations we'll do a proper fact-find first. There's no cost and no pressure.
Sources: Australian Bureau of Statistics, Labour Force, Australia, September 2026 (released 15 October 2026, 11:30am AEDT). The Conversation, Jeff Borland, “Unemployment in Australia hits a five-year high of 4.7%, making a rates hike less likely”, 15 October 2026. ABC News, Gareth Hutchens, “Unemployment remains at 4.7pc in September with interest rate hike possible”, 15 October 2026. ActionForex, “Australia Loses 39.3K Jobs, Sending RBA Hike Odds Lower as Labour Market Cools”, 15 October 2026 (Bloomberg pricing for market odds). Reserve Bank of Australia, cash rate target overview (4.60%, effective 30 September 2026; next update 2:30pm AEDT 3 November 2026). Repayment example reused from Loanworth's 12 October November outlook (Loanworth calculation, rounded, example only). Economist calls attributed to the people and houses named via ABC News and may change.
General information only, not credit advice. It doesn't take your objectives, financial situation or needs into account.
Loanworth Pty Ltd (Credit Representative Number 547934) is a Credit Representative of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).