Australia's unemployment rate jumped to 4.5 per cent in April as the economy shed 18,600 jobs, a weaker result than economists had expected and a sign the labour market is losing momentum. The number of unemployed people rose by 33,000.

Economists had expected the unemployment rate to hold at 4.3 per cent and for employment to grow by 15,000 jobs. Instead, the participation rate fell 0.1 percentage points to 66.7 per cent, while hours worked rose by 15.8 million hours and hours worked per person increased by 0.9 per cent.

Sean Crick said more people stayed unemployed in April than usually happens at that time of year, and the figures point to a labour market that is cooling without yet collapsing. The weak result was driven by a fall in female employment, which was down 19,000 full-time roles and 13,000 part-time roles, the first decline in that measure since August 2025.

The labour data lands as the Reserve Bank weighs inflation risks against signs that demand is softening. Earlier in May, the central bank forecast the unemployment rate would average 4.2 per cent in the June quarter, and minutes from its meeting released on Tuesday showed most board members still saw fighting inflation as the priority.

Markets are already leaning toward easier policy, with money markets pricing about a 15 per cent chance of a rate hike at the next Reserve Bank meeting in June and fully pricing in one rate rise by November. Commonwealth Bank also cut its economic growth forecast from 1.9 per cent to 1.6 per cent by the end of 2026 and lifted its peak unemployment forecast from 4.4 per cent to 4.6 per cent.

Anders Magnusson said the latest figures should give the Reserve Bank some comfort that demand is starting to soften, but he warned the rise in hours worked shows the picture is more mixed than the headline job loss suggests. Amanda Rishworth said the data showed the ongoing resilience of the Australian labour market, even with the uptick in unemployment, because it remains low by historical standards. The next test will be whether weaker hiring feeds through into the June quarter and pushes the central bank closer to a cut instead of another hike.