'A solid set of numbers'
“Overall, the March labour force survey was a solid set of numbers,” Commonwealth bank economist Harry Ottley said. “Employment growth continues and has picked up the pace in recent months. And the unemployment rate remains low at 4.3%. Our assessment remains that the labour market remains on a solid footing and was strengthening modestly in early 2026,” he said.
But the ongoing strength of the employment market means a tight supply of workers for employers, which may bid up wages and fuel inflation. Current jobless numbers may be “too tight for comfort for the RBA”, Ottley said.
“This current tightness however is now less of a concern given the downside risks the labour market faces from higher interest rates and the energy crisis,” he said.
The central bank has lifted the official cash rate at each of its meetings in 2026, with the bank's governor Michele Bullock outlining concerns on inflation ahead of the Iran war.
“We expect the unemployment rate to rise from here as economic growth in Australia slows. We expect a peak of 4.7 per cent in late 2027, but risks around this forecast depend on how the energy crisis unfolds from here,” Ottley said.
'A position of relative strength'
Federal Treasurer Jim Chalmers said the figures were reassuring despite the global volatility.
"We are not immune from the impacts of this conflict on the other side of the world, but we confront them from a position of relative strength due to our resilient labour market," he said.
"It is encouraging to see the unemployment rate remain at 4.3 per cent despite all of the uncertainty in the global economy right now."
In a recent report, the International Monetary Fund said the war, if not resolved soon, could cause a global recession, although Australia would likely experience stronger economic growth than other advanced economies.
