The jobs market saw a net increase of nearly 25,000 positions, driven by a surge of 60,000 full-time roles. Female workforce participation reached a record high, with 40,000 additional full-time female workers, while overall participation held steady at 67 per cent.
The headline result was broadly in line with forecasts and signals ongoing stability in the labour market. Economists noted that while unemployment has risen slightly since its low point of 3.4 per cent in October 2022, the current figure remains historically low.
Other indicators also improved in July. The underemployment rate fell to 5.9 per cent, and total monthly hours worked increased. Analysts said elevated participation and a strong employment-to-population ratio confirm that the labour market remains healthy. However, there are signs of gradual easing as supply and demand move toward balance.
Not all measures were as positive. Over the first seven months of 2025, employment has grown by just 113,300 people. If that pace continues, annual jobs growth could fall short of 200,000, which would lag behind the expansion of Australia’s working-age population. This trend could put upward pressure on unemployment in the coming months.
Despite slower growth, job advertisements and vacancies remain elevated, suggesting there are still opportunities available for job seekers. Economists believe this supports a relatively optimistic outlook, even if recent figures have been mixed.
The jobs report also influenced market expectations for interest rates. The Australian dollar rose to a two-week high following the release, as the stronger-than-expected labour data reduced the likelihood of a September rate cut. The Reserve Bank of Australia (RBA) recently lowered the cash rate by 0.25 per centage points to 3.6 per cent, with financial markets now viewing November as the most likely window for another reduction.
While the RBA’s forecasts still point to the unemployment rate sitting at 4.3 per cent by December, its policy direction will likely depend on whether the labour market continues to loosen. Economists expect that with inflation now back within the target range, employment trends will play a greater role in upcoming decisions.
Overall, the July data reflects a labour market that remains tight by historical standards but is showing early signs of cooling. The RBA will be watching closely, with future policy moves hinging on whether job creation can keep pace with population growth.
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