"New data shows the Australian labour market is increasingly weakening, pointing to the urgent need to kick-start the private sector economy," said Innes Willox, Chief Executive of national employer peak body the Australian Industry Group.
The unemployment rate increased to 4.1% in January 2025, while total hours worked fell for the first time in nine months.
It is telling that of the 67,000-person net increase in the Australian labour force in January, around a third were previously unemployed. The steep fall in wages growth reported for the December quarter of 2024 – from 3.6% to 3.2% p.a. – is a further sign of potential weakness.
"We know that the private sector labour market is more fragile than the headline employment figures suggest," Mr Willox said. "Eighty-five per cent of net job creation in the past year was generated in either the public or non-market sectors, with jobs growth in the market private sector running at a paltry 0.6% p.a.
"This data is unsurprising given the weak state of the private sector economy. Economic growth has become dependent on increasing public spending, while many private sector industries are facing recession-like conditions.
"Mounting global risks – whether originating from trade, inflation or capital markets – further affirm the uncertainties currently facing Australian businesses and the economy as a whole.
"We cannot sustain Australia's strong labour market without strong businesses. The market private sector accounts for around 70% of jobs in Australia. Urgently rebooting conditions for business investment, employment and growth must be a top priority going into this election year," Mr Willox said.
