Australia unemployment to rise in January as RBA keeps option for further rate hikes
Australia’s unemployment rate is forecast to rise in January 2025 as the labour market shows signs of cooling. Economists expect a 0.2–0.3 percentage-point uptick from historically low levels, driven by weakening hiring intentions, falling job adverts and sectoral strains in construction, retail and technology. The Reserve Bank of Australia (RBA) has maintained a hawkish stance, signaling it will keep open the possibility of further cash-rate increases to tackle persistent services inflation and above-target wage growth. Analysts expect subdued growth in H1 2025, with the RBA data‑dependent on inflation and wages before any easing. For traders: rising unemployment paired with a still‑tight monetary policy increases downside risk for risk assets and could weigh on Australian equities and AUD; markets will closely watch monthly labour and CPI releases for cues on the RBA’s next move.
Bearish
Rising unemployment while the RBA remains open to further rate hikes is a negative mix for risk assets. Historically, higher unemployment and tighter monetary policy reduce consumer spending and corporate revenues, denting equities and commodity-linked currencies. For crypto markets, similar macro episodes (e.g., 2022 global tightening) produced sizeable price drawdowns as liquidity tightened and risk sentiment turned negative. Short term: expect increased volatility and potential sell pressure on crypto, especially if AUD crosses, Australian listings or local investor flows are involved. Longer term: if unemployment rise eventually eases wage-driven inflation, the RBA may pause or cut rates late 2025, which could restore liquidity and lift risk assets including crypto. Traders should monitor unemployment prints, wages and CPI — adverse surprises may trigger further downside, whereas clear disinflation could be a turning point for risk-on positioning.