Job Creation Soft

Why It Matters

The soft job creation limits upward wage pressure and constrains monetary‑policy flexibility, while also questioning the sustainability of current immigration‑driven labour supply assumptions.

Key Takeaways

• Net jobs rose only 18k in January.
• Full‑time jobs added 50.5k, part‑time fell 32.7k.
• Under‑employment climbed to 5.9%, employment‑population ratio dropped.
• Hours worked increased, but unemployment unchanged at 4.1%.
• Growth below immigration break‑even, indicating labour market softness.

Pulse Analysis

Australia’s labour market has entered a period of tepid growth, as the latest ABS figures reveal a net gain of just 18,000 jobs in January 2026. While full‑time positions expanded by over 50,000, part‑time roles contracted, pulling the overall employment‑to‑population ratio down to 63.9 %. The rise in under‑employment to 5.9 % underscores a growing mismatch between available work hours and workforce capacity, a nuance often missed in headline unemployment rates.

For policymakers, the subdued job creation signals limited inflationary pressure from wage growth, granting the Reserve Bank of Australia more leeway to maintain a cautious stance on interest rates. At the same time, the data challenges the premise that immigration alone can offset labour shortages; the current growth falls short of the break‑even threshold needed to sustain a balanced labour supply. Businesses, especially in sectors reliant on part‑time staff, may need to reassess staffing strategies and consider productivity‑enhancing investments rather than expanding headcount.

Looking ahead, the trajectory of Australian employment will hinge on both domestic demand and the effectiveness of immigration policy adjustments. If under‑employment continues to rise, consumer spending could be dampened, affecting retail and services. Conversely, a rebound in part‑time hiring or a surge in hours worked could revive growth momentum. Stakeholders should monitor upcoming ABS releases and RBA commentary closely to gauge whether the labour market’s softness is a temporary blip or the new normal.

Job creation soft

Australian Economy · Via the ABS comes Labor Force in seasonally adjusted terms for January 2026:

• Part‑time employment decreased by 32,700 to 4,548,400 people.

• Full‑time employment increased by 50,500 to 10,155,500 people.

• Monthly hours worked increased to 2,013 million.

• Under‑employment rate increased to 5.9 %.

• Employment‑to‑population ratio decreased to 63.9 %.

• Employment increased to 14,703,800.

• Participation rate remained at 66.7 %.

• Unemployment rate remained at 4.1 %.

It’s hardly a tear‑away job market at +18 k on the month. This is below the break‑even rate for immigration.

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About the author

David Llewellyn‑Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo‑politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co‑author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.