AUSTRALIA DATA: Fewer Older Workers Returned To Work In February

February employment was weaker than expected falling 52.8k due to fewer older workers returning, while January was revised down to +30.5k. There has been an increase in retirees in recent months according to the ABS. The number of unemployed also fell and so the unemployment rate was unchanged at 4.1%, while underemployment continued to fall. There was a large drop in the participation rate. Jobs data can be volatile and some indicators tightened further, so the RBA will be looking for further evidence of a sustained easing of the labour market.

Australia unemployment rate %

• While the headline number is soft, not only does there seem to be a structural reason but other labour market indicators that the RBA monitors tightened. The unemployment rate was 4.05% down from 4.11% and underemployment fell 0.1pp to 5.87%, its lowest since August 2008. Thus the underutilisation rate fell 0.2pp. The youth unemployment rate was stable. All these measures signal that the labour market remains tight.
• The ABS notes that “fewer older workers returning to work in February contributed to the fall in employment this month, with lower levels of employment in the older age groups in February 2025 compared with 2024.” Increased participation by these groups had boosted the employment ratio but that fell 0.3pp in February to 64.1%, its lowest since June.
• There are tentative signs of a switch towards part-time workers (PT) and away from full-time (FT) signalling some caution about the outlook. 3-month annualised momentum rose 2pp to 4.8% for PT but FT declined to 1.1% from 2.5%. This trend is also reflected in hours worked with PT up to 5.0% 3m/3m annualised and FT down to 3.5%.
• The labour force fell 64k in February, thus more than offsetting the 52.8k drop in employment resulting in a 11.2k fall in the number of unemployed. 

Australia full-time vs part-time employment 3m/3m average annualised %

Source: MNI - Market News/ABS