TLDR
Australia's unemployment rate climbed to 4.6% in August 2026, its highest level since 2021, as more people entered the job market than found work. CBA and ANZ both forecast a rate hike on 29 September.
KEY TAKEAWAYS
What the ABS found
Australia's seasonally adjusted unemployment rate rose to 4.6% in August 2026, the highest rate in four years.[2] Unemployment was last this high in August 2021.
The labour force participation rate increased by 0.2 percentage points to 67.1% in August, meaning the rise in unemployment was driven by people entering the workforce, not by employers cutting jobs.[1]
Sean Crick, the Australian Bureau of Statistics (ABS) head of labour statistics, said that in August a higher proportion of people who were previously not in the labour force moved to being unemployed compared to recent years.[1]
What the banks expect
CBA and ANZ both expect the Reserve Bank of Australia (RBA) to raise the cash rate from 4.35% at its meeting on 28 and 29 September.
Belinda Allen, CBA Head of Australian Economics, said the bank now expects the RBA to hike the cash rate by 25 basis points to 4.60% at its 28-29 September meeting.[3] CBA made the forecast on the day the ABS released the August figures.
Sophia Angala, ANZ Economist, said the bank now expects the RBA to increase the cash rate by 25 basis points in September, in addition to another 25 basis point rate hike expected in November.[4] ANZ flagged this double-hike call on 22 September, two days before the ABS release.
Thursday's market
The Australian Securities Exchange (ASX) fell on Thursday on a combination of Wall Street losses and a surge in the oil price. Higher oil prices raise transport and business costs, which adds to inflation.
For marketing and media budgets, a 25-basis-point rise going into the peak consumer-spending quarter lifts the cost of any debt-funded campaign activity and tends to compress household discretionary spending, the spending most brand advertising is aimed at. CBA's forecast would put the cash rate at 4.60%; ANZ's November call would push it to 4.85% before Christmas.
The RBA's Monetary Policy Board meets on 28 September.
SOURCES & CITATIONS
FREQUENTLY ASKED QUESTIONS
Why did unemployment rise if people weren't losing their jobs?
What does a rate hike mean for marketing and media budgets?
Why are futures markets pricing no hike when CBA and ANZ are forecasting one?
James Dore is Strategy Director at Bushnote, a leader in SEO and AEO in Australia. He writes on search, AI and the technology decisions shaping government and industry.
Important
This article contains general financial information only and does not constitute financial advice. It is not personal financial advice and has not been prepared having regard to your objectives, financial situation or needs. Before making any financial decision, you should consider whether the information is appropriate for your circumstances and seek professional financial advice if needed. Past performance is not indicative of future performance.
