The RBA's August forecasts show employment growth lifting to 1.4 per cent by the end of 2026 before easing back towards about 1.1 per cent, a profile that helps explain why the Bank expects unemployment to drift higher.

Forecast tables rarely make headlines, but the employment row in the RBA's August 2026 Statement on Monetary Policy tells a quiet story about the jobs market. Year-ended employment growth was 1.1 per cent in June 2026. Staff expected it to pick up to 1.4 per cent by December 2026, then ease to 1.2 per cent by June 2027 and back to 1.1 per cent through December 2027 and June 2028, before edging up to 1.2 per cent at the end of 2028.

In other words, after a short-lived lift, the forecasts have hiring settling at roughly the pace it was running in mid-2026. For job seekers, employers and anyone trying to make sense of where the labour market is heading, the detail behind those numbers matters as much as the headline.

What the forecast path looks like

Set out half-year by half-year, the August employment forecasts (year-ended growth) are:

  • June 2026: 1.1 per cent
  • December 2026: 1.4 per cent
  • June 2027: 1.2 per cent
  • December 2027: 1.1 per cent
  • June 2028: 1.1 per cent
  • December 2028: 1.2 per cent

These figures were finalised on 5 August 2026, before the Monetary Policy Board raised the cash rate target by 25 basis points to 4.60 per cent on 29 September. The forecasts were built on a cash rate assumption that peaked at 4.5 per cent, so the actual cash rate now sits above every assumption in the table. That does not make the forecasts wrong, but it is a reminder that they reflect conditions as they were understood in early August.

Jobs growth versus population growth

One way to read the employment path is to set it beside the Bank's population forecasts. Population growth was 1.4 per cent in June 2026 and is expected to slow to 1.3 per cent by mid-2027 and 1.2 per cent from late 2027 onwards.

Placed side by side, forecast employment growth is at or below population growth at every point in the table. It matches population growth in December 2026 and December 2028 and trails it at the other dates. Total population is not the same as the working-age population, and the share of people in the workforce can shift, so the comparison is only a rough guide. Still, when jobs grow no faster than the population, it becomes harder for the unemployment rate to fall.

That is consistent with the Bank's unemployment forecasts. The August Statement expected the unemployment rate to rise from 4.4 per cent in June 2026 to 4.5 per cent by December 2026, 4.6 per cent by June 2027, 4.7 per cent by December 2027 and 4.8 per cent by mid-2028, where it stays through the end of 2028. The RBA described the path to 4.8 per cent as a modest upward revision from its May forecasts, mainly reflecting a higher starting point.

The latest monthly reading is already at the level the August forecasts had pencilled in for June 2027. The minutes of the September meeting note that the unemployment rate rose to 4.6 per cent in August, alongside a rise in participation.

What the RBA says about labour demand and rates

Slower forecast employment growth does not mean employers have stopped hiring. The minutes record that most leading indicators pointed to stable labour demand, and that some job advertisement measures had strengthened slightly. The Board's statement described labour market conditions as having eased broadly as expected.

Members also cautioned against reading too much into the latest labour force figures because of changes to survey methodology. That caution matters for anyone tracking monthly releases: a single month's movement may say less than usual about the underlying trend.

Governor Michele Bullock put the recent history in context at her 29 September media conference. She noted that unemployment was 4.6 per cent, compared with about 3.5 per cent a couple of years earlier, and that more than one million jobs had been created over that period. She also observed that "the unemployment rate is still quite low historically". Her overall assessment was that "Productivity growth remains weak and the labour market remains a little tight."

The jobs market sits at the centre of the Bank's decisions. In its closing remarks, the Board said it "will remain focused on its mandate to deliver price stability and full employment". When members weighed the September decision, the minutes show that downside risks to activity and employment were part of the case for holding rates steady, along with the lagged effects of earlier tightening. Bullock said it takes about 12 to 18 months for interest rate changes to have their full effect, so September's rise is likely to keep working through the economy across much of the period shown in the table.

On the other side of the ledger, the Board judged that inflation remained too high. Bullock said: "Inflation is too high and has been driven by domestic capacity pressures." The minutes also note that unit labour cost growth was above what is consistent with the inflation target, driven mainly by subdued productivity growth rather than strong nominal wages.

What it could mean for job seekers and employers

The forecasts are not a prediction of mass job losses. Employment is still expected to grow in every period, by more than one per cent a year. What they describe is a labour market where new jobs keep being created, but at a pace that may not absorb all new entrants as readily as in the recent past.

For workers and businesses, some general observations follow:

  • Job seekers may find competition for roles somewhat stronger if unemployment edges up as forecast.
  • Employers may find recruitment a little less difficult than during the tightest period, though the Governor still describes the market as a little tight.
  • Anyone relying on a single monthly labour force release should keep in mind the Board's caution about survey methodology changes.

These observations are drawn from the RBA's own published material, not forecasts for any particular industry or region. People making career, business or financial decisions may wish to seek advice from a licensed professional.

The bottom line

The August 2026 forecasts show employment growth lifting to 1.4 per cent by late 2026 and then easing back towards about 1.1 per cent, at or below population growth throughout. That profile sits behind the Bank's expectation that unemployment will rise gradually to 4.8 per cent. The forecasts predate the September rate rise, and the next Statement on Monetary Policy is listed in the RBA calendar for November 2026.