Unemployment in Australia reaches 4.7%, its highest in nearly five years

Unemployment has reached 4.7% after the Australian economy shed jobs in September. Photograph: Steven Saphore/AAPView image in fullscreenUnemployment has reached 4.7% after the Australian economy shed jobs in September. Photograph: Steven Saphore/AAPUnemployment in Australia reaches 4.7%, its highest in nearly five yearsThe total number of employed Australians dropped by 39,300 jobs in the month, a surprise for economists who had expected employment to rise

Unemployment has reached 4.7% and is at its highest in nearly five years after the economy shed jobs in September as cost of living and higher interest rates bite.

The total number of employed Australians dropped by 39,300 jobs in the month, a surprise for economists who had expected employment to rise.

Full-time employment increased by 34,400 in September, but this was more than offset by a sharp drop in part-time employment of 73,700.

The Australian Bureau of Statistics figures would have shown the jobless rate ticking higher last month had it not revised up the August figure from 4.6% to 4.7%.

Economists had identified this week’s labour force statistics as a key bit of information for the RBA ahead of its next interest rate decision on 3 November.

Financial markets prior to the release of the jobs figures put a 40% chance of a fifth Reserve Bank interest rate hike on 3 November.

Underemployment, which includes those with jobs but trying to find more work, lifted to 6.3%, from 6.2% in September.

Financial markets this morning, and before the latest data, put a 40% chance of a hike on Melbourne Cup day, which would be the fifth for the year as the central bank attempts to bring inflation back toward its 2.5% target over the coming 12 months.

The unemployment rate has lifted this year from 4.1% as the economy slows, but there are no immediate signs of a rapid deterioration in the jobs market.

RBA board members at their last meeting discussed how the labour market appeared “broadly stable”.