Australian Unemployment Drops to 4.1% as 65,000 Find Jobs in December
Youth employment surge drives national jobs growth, economy adds record hours
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Australia’s unemployment rate fell to 4.1 per cent in December 2025, as 65,000 people found work in what the Australian Bureau of Statistics described as a youth-driven employment surge. The December figures, released Thursday, show the labour market tightening despite ongoing cost-of-living pressures affecting younger workers.
The seasonally adjusted unemployment rate dropped from 4.2 per cent in November, with both full-time employment (up 55,000) and part-time work (up 10,000) contributing to growth. The participation rate—the share of working-age Australians either employed or actively seeking work—rose slightly to 66.7 per cent, despite 30,000 fewer people being classified as unemployed.
“This month we saw more 15-24 year olds moving into employment, contributing to the rise in overall employment and the fall in the unemployment rate,” said Sean Crick, ABS head of labour statistics. The statement marks a reversal from recent months when younger workers faced disproportionate difficulty entering the job market.
The employment gains were heavily skewed toward male workers, who accounted for 49,000 of the 65,000 new jobs, while female employment rose by 17,000. Hours worked increased 0.4 per cent, matching the rise in employment and suggesting employers are utilizing their workforces more intensively rather than simply hiring for reduced hours.
December 2025 marked a historic milestone: seasonally adjusted monthly hours worked exceeded 2 billion hours for the first time. “In December 2025, seasonally adjusted monthly hours worked reached a record high of over 2 billion hours for the first time,” Crick noted, signaling sustained economic activity despite recession fears that have circulated throughout 2025.
The data covers the survey period from November 23 to December 6, 2025—before the holiday hiring surge but capturing end-of-year economic activity. The timing suggests the employment gains reflect genuine labour market strength rather than temporary seasonal patterns, though economists typically wait for multiple months of data to confirm trends.
Underemployment—workers who want more hours than they’re getting—fell 0.5 percentage points to 5.7 per cent. The underutilization rate, which combines unemployment and underemployment, dropped 0.7 percentage points to 9.8 per cent, its lowest level since mid-2023.
In trend terms, which smooth out monthly volatility, the unemployment rate fell marginally to 4.2 per cent. Trend employment grew by approximately 25,000 people (0.2 per cent) in December and 1.2 per cent over the past year. Annual hours worked grew 1.0 per cent, slightly below the 1.2 per cent rise in employment, suggesting some shift toward slightly shorter working arrangements.
What remains unknown is how sustainable this employment growth will be. The Reserve Bank of Australia has maintained interest rates at elevated levels throughout 2025, and economists disagree on whether the labour market can continue strengthening or will eventually cool as rate pressures filter through the economy. The December data doesn’t reveal which industries drove hiring or where geographically the jobs appeared—that detail will come in the ABS’s detailed release on January 29.
What both sides agree on: The labour market has strengthened, with more people working and unemployment falling.
Why this matters to Gen Z and Gen Alpha: If you’re 15-24 and job hunting, these numbers are unusually good news. The ABS explicitly called out your age group as driving employment growth, meaning employers are actually hiring younger workers instead of demanding years of experience for entry-level roles. The record hours worked also suggests businesses are busy enough to need staff, not just offering gig-economy scraps with 10 hours a week. However, the gender gap in hiring (49,000 men vs 17,000 women) might affect your opportunities depending on which industries are growing.
Next steps include the January employment data (due in late February) and the detailed December breakdown (due January 29), which will reveal which sectors and regions saw growth. If youth employment continues rising, it could shift bargaining power toward workers and potentially lead to higher entry-level wages—but only if the trend holds beyond one month.
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