Australia's unemployment dropped to 4.1% in December 2025, fueled by strong job growth and higher labor participation.

Australia's unemployment rate fell to 4.1% in December 2025, down from 4.3% in November, according to the Australian Bureau of Statistics, driven by a 65,200 increase in employment, particularly in full-time roles. The labor force participation rate rose slightly to 66.7%, and total hours worked reached a record 2.0 billion. The stronger-than-expected job growth has increased speculation that the Reserve Bank of Australia may raise interest rates in February 2026, though the final decision will depend on upcoming inflation data.