By Shane Rodgers
A jump in the unemployment rate in April has increased fears that the economy is on a path to “perfect storm” stagflation.
Stagflation occurs when inflation remains high in times of falling employment and low economic growth.
This raises the risk that further measures to control inflation, like lifting interest rates to slow spending, will push the economy into recession.
Australian Bureau of Statistics figures released today show the seasonally adjusted unemployment rate rose to 4.5 percent in April, up from 4.3 percent the previous month.
ABS head of labour statistics Sean Crick said the number of employed people fell by 19,000 in April, while the number of unemployed people rose by 33,000.
“The number of unemployed people looking for full-time work increased by 11,000, and unemployed people looking for part-time work increased by 22,000,” Mr Crick said.
“Compared to what we usually see in April, more people remained unemployed this month.”
Mr Crick said full-time employment fell by 11,000 and part-time employment was down 8000.
“A drop in female employment drove the overall fall in employment, with full-time down 19,000 people, and part-time down 13,000 people,” he said.
“This is the first fall in female employment since August 2025.”
Despite the fall in employment this month, hours worked rose by 15.8 million hours off the back of employed people working more hours.
The Reserve Bank of Australia (RBA) has lifted the official cash rate three times this year as it struggles to bring inflation down in an economy rattled by an oil price shock, high energy prices and housing supply issues.
The most recent figures showed annual consumer price inflation rose to 4.6 percent in March, up from 3.7 percent in February.
The Reserve has indicated that further interest rate rises may be necessary if inflation remains out of the 2-3 percent target zone.
It has also put some pressure on the Federal Government to use fiscal policy more effectively to stabilise the CPI.
The full report is here.
