Unemployment stays steady at 4.3% in March

In March 2026, the seasonally adjusted unemployment rate stayed at 4.3 per cent, after a slight uptick in February. The participation rate also stayed steady at 66.8 per cent, and the number of employed people increased by 30,800.

Sean Crick, ABS head of labour statistics, said, “The number of employed people rose by 18,000 and the number of unemployed people fell by 4,000 in March.

“Growth in employment was driven by full-time workers, which rose by 53,000 people in March. This was partly offset by a fall in part-time employment of 35,000 people.”

BDO chief economist Anders Magnusson said the March unemployment data was “consistent with the RBA’s pre-war forecast,” and by itself was unlikely to materially shift bond and futures market expectations of interest rates.

Prior to the release, the Commonwealth Bank predicted that the unemployment rate would lift slightly to 4.4 per cent, the participation rate would remain steady at 66.9 per cent, and employment would boost by 20,000.

Westpac had anticipated a dip in the participation rate, to 66.8 per cent, and a slight fall in the unemployment rate to 4.2 per cent.

In a 10 April preview of the ABS data, Westpac economist Ryan Wells said the March unemployment data would be significant as it was the first piece of official ‘hard’ economic data released since the Middle East conflict began on 28 February.

That being said, Wells anticipated that the labour force data would only capture the first two weeks of the conflict, meaning its impacts were unlikely to be reflected in the numbers yet.

“This is far too early to detect any meaningful shift in broad labour market conditions in Australia that could be tied to the Middle East conflict,” he said.

“This is because the labour market sits further downstream from price shocks, which take time to work through household spending to margins and decisions around investment and staffing.”

BDO’s Anders Magnusson echoed this sentiment following the release of the March unemployment data.

“It’s easy to forget how recently the conflict in Iran began. March was the first month of the war, but today’s March labour market data says more about underlying capacity constraints and domestic inflation pressures pre-war than about the current energy crisis,” he said.

“Any impact of the war on unemployment is more likely to arrive over the next few months.”

Wells added that economists’ expectations about the Middle East conflict had shifted, with analysts anticipating that it would be larger and more persistent than initially assumed. Westpac now anticipated three more 25 basis point rate hikes from the central bank this year, in May, June and August.

This would lead to a greater weakening of the labour market in the second half of 2026.

“A combination of softer labour demand and slightly higher labour force participation means that more slack will open up in the labour market this year, with the unemployment rate expected to rise from 4.3 per cent currently to a peak of 5 per cent by early-2027,” Wells said.

AMP economist My Bui said the steady March jobs data likely gave the RBA more wiggle room to raise interest rates.

“While labour data tends to be lagging indicators, it tells us that the economy is starting off from a strong base at the start of the rate hikes and fuel disruptions,” Bui said.

“It also means that the Reserve Bank has the capacity to focus a bit more on containing inflation at the moment, rather than having to worry too much about jobs.”

Magnusson predicted that the RBA would likely hike rates at its May meeting.

“For the RBA, inflation remains the central focus. An uptick in the unemployment rate in March would have been welcomed in that context, as it would have given the RBA more scope to wait and assess whether global supply shocks translate into stagflation,” he said.

“With unemployment steady, it is likely that the RBA will raise the cash rate at the next meeting.”

This article first appeared on Accounting Times' sister brand, HR Leader.