2026-02-18 21:09:00
Summary:
Analysts expect a moderation in employment growth in January following December’s outsized gain, with the unemployment rate seen ticking slightly higher. The labour market is viewed as broadly steady rather than re-tightening, though January’s seasonal volatility adds uncertainty.
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Australia’s January labour force survey will be closely watched as policymakers assess whether the recent stabilisation in labour market conditions signals renewed tightness or simply reflects monthly volatility.
December delivered a stronger-than-expected outcome, with employment rising by 65.2k and the unemployment rate falling to 4.1% from 4.3%, even as participation edged up to 66.7%. Analysts broadly view the strength as partly influenced by survey volatility rather than a clear re-acceleration in labour demand.
For January, expectations are centred on a more moderate outcome. Analysts anticipate employment growth in the 15k–40k range, with the unemployment rate edging up to around 4.2%. Participation is expected to lift slightly to around 66.8%.
The broader view is that the labour market remains in relatively good shape, but not materially tightening. Employment growth appears to be stabilising near cyclical lows, with labour demand steadying while labour supply gradually normalises. A modest cyclical unwind in labour supply has helped keep the unemployment rate broadly contained.
January is historically one of the most volatile months for labour data. Seasonal factors, including shifting hiring patterns around year-end retail activity and the treatment of “marginally attached” workers, can distort headline figures. Analysts caution that separating signal from noise may take several months of data.
For the Reserve Bank, the key question is whether the recent pause in labour market softening is temporary or the start of renewed capacity pressure. With inflation pressures having re-emerged, today’s data will help shape the near-term policy outlook, though one month’s result is unlikely to be decisive.
What to watch:
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Employment change (consensus around +15k to +40k)
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Unemployment rate (seen ticking up to ~4.2%)
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Participation rate (expected near 66.8%)
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Full-time vs part-time split
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Any signs of renewed wage-pressure momentum via hours worked
A softer-than-expected print (employment near flat, unemployment 4.3%+) would likely ease immediate RBA tightening fears and weigh on AUD. A second strong upside surprise could reignite rate rise expectations and support the currency.
