As 2024 draws to a close, Australia’s labour market has proven remarkably resilient, with the unemployment rate ending the year at 3.9 per cent. This marked a notable improvement from the RBA’s earlier forecast of 4.3 per cent by December. Despite slower economic growth, employment continued to expand, defying predictions and creating a complex narrative for policymakers and economists alike.

The Australian Bureau of Statistics (ABS) reported consistent employment gains throughout 2024. In November alone, 35,600 new jobs were added, reinforcing the tight labour market conditions seen throughout the year. David Taylor, head of labour statistics at the ABS noting “Compared to pre-pandemic levels, both unemployment and underemployment measures remain historically low, reflecting a labour market that continues to run tight”.

The strong labour market data posed challenges for the Reserve Bank’s monetary policy stance. Throughout the year, the RBA sought to balance its fight against inflation with concerns about economic slowdown. While inflation continued trending downwards, sitting at 3.5 per cent by the September quarter, the persistently low unemployment rate complicated the RBA’s path toward rate cuts.

“With inflation risks still present and household spending showing signs of life, rate cuts are likely to remain off the table for at least the first quarter of 2025”, EY senior economist Paula Gadsby, stating.

In a year marked by global uncertainty and slowing growth, Australia’s labour market stood out as a beacon of resilience. Unemployment remained near historic lows, consumer confidence rebounded, and inflation pressures began to ease. However, the RBA’s cautious stance suggests that while 2024 delivered promising outcomes, the path to stability in 2025 will require careful navigation.

Anecdotally, the team at Atlas Partners have experienced a noticeable uplift in hiring sentiment in the final quarter of 2024. Redundancies, whilst persistent throughout the year, have become less of a feature of the market. For most of our clients, the hard decisions have now been made, with recovery and growth now the expectation.