The latest jobs data showed modest improvement in labour market conditions as the unemployment rate slightly dipped by 0.2%.

The Australian Bureau of Statistics (ABS) reported that unemployment decreased by 17,000 and employment increased by 42,000, although 669,600 people remain unemployed.

Sean Crick, ABS head of labour statistics, said the October unemployment rate is in line with June, July, and August 2025.

"This month, more unemployed people moved into employment compared to a typical October," Mr Crick said.

In a recent media release, the Reserve Bank of Australia (RBA) noted that labour market conditions remain somewhat tight, despite these small signs of easing.

The central bank highlighted that underlying strength persists, with job vacancies staying high and many firms continuing to report difficulty sourcing suitable workers.

Full-time jobs surge as part-time roles decline

Full-time employment experienced a significant boost in October, rising by 55,000.

Women accounted for more than half of this increase, with 29,000 joining full-time roles, while male full-time employment rose by 26,000.

This growth in full-time work came amid a decline in part-time employment, which fell by 13,000 over the month.

Despite these shifts in the composition of employment, the overall labor force participation rate remained steady at 67% in October.

Modest unemployment dip unlikely to sway RBA

A 0.2 percentage point dip in unemployment isn't likely to move the needle for the Reserve Bank of Australia just yet - and some signs even suggest the next move could still be upward rather than down.

The latest jobs figures reverse the surprise shock of 4.5% last month, giving the RBA room to hold steady for now.

Unemployment remains low by historical standards, and while wage growth has begun to ease, it's not slowing fast enough to warrant an immediate shift toward lower rates.

In recent weeks, several major banks have lifted their fixed-rate loan offerings, a move analysts say could indicate lenders are bracing for the possibility of higher borrowing costs ahead.

The shift marks a sharp reversal from earlier this year, when expectations of a rate cut in late 2024 or early 2025 had prompted banks to trim fixed rates.

That sentiment appears to have changed following stronger-than-expected inflation figures for the year to September, which saw the RBA leave the cash rate unchanged at its most recent meeting.

The central bank has signalled that it wants more evidence that price pressures are easing before considering any cuts.

Some banks' economics teams, including the Commonwealth Bank, have since revised their forecasts, suggesting the rate-cutting cycle many anticipated may now be off the table for the foreseeable future.

HSBC's Paul Bloxham said there might not be any rate cut at all in 2026, and that the next move could be a hike in 2027.