The April revision from minus 18,600 to minus 40,700 is the number that reframes the entire report. The two-month average across April and May now sits at essentially flat, which is a materially weaker picture than the May headline alone implies and aligns with the gradual softening narrative the RBA has been willing to tolerate without acting. The part-time composition of May’s gain, 35,200 of 40,300 jobs, is a further softening signal, as is the 1.1% fall in hours worked, which is the variable most closely correlated with near-term output and wage pressure.

Household spending beating expectations strongly at 1.3% against a 0.5% forecast and annual growth of 5.5% is the hawkish counterweight, suggesting consumer demand is more resilient than the labour market internals imply and keeping the door open for Westpac’s August hike call. The first decline in job vacancies since mid-2025 adds to the picture of a labour market that is losing momentum at the margin.

— Australia added 40,300 jobs in May and unemployment fell to 4.4%, but April was revised sharply lower to minus 40,700, hours worked fell 1.1% and most of the gain was part-time, tempering the headline bounce.

Summary:

• Australian employment rose 40,300 in May, above the 30,300 forecast and reversing April’s decline, though April was revised sharply lower to minus 40,700 from the initial minus 18,600, per the Australian Bureau of Statistics
• Full-time employment rose just 5,200 while part-time employment gained 35,200, with hours worked falling 1.1% month-on-month, per ABS
• The unemployment rate fell to 4.4% from 4.5%, in line with expectations, while the participation rate held steady at 66.7%, below the 66.8% forecast, per ABS
• Australian household spending rose 1.3% in May against a 0.5% forecast, reversing April’s 1.1% decline, with annual growth accelerating to 5.5% from 4.9%; transport, clothing and eating out were the largest contributors, per ABS
• Job vacancies fell 2.1% in the May quarter, the first decline since August 2025, with private sector vacancies down 1.4% and public sector vacancies dropping 7.9%, leaving total vacancies at 329,500, down 2.1% year-on-year, per ABS
• Westpac has flagged an August RBA rate hike as its base case, while the broader market consensus points to the RBA remaining on hold at the August meeting pending further data

Australia’s labour market posted a stronger-than-expected headline gain in May but a closer reading of the data, particularly a sharp downward revision to April and the part-time composition of the recovery, delivered a more ambiguous picture for the Reserve Bank of Australia heading into its August policy meeting.

Employment rose 40,300 in May, above the 30,300 market forecast and reversing April’s decline. However, the ABS simultaneously revised April’s employment change from minus 18,600 to minus 40,700, a restatement that reframes the two-month trajectory considerably. Averaged across April and May, net employment is essentially flat, consistent with a labour market that is softening gradually rather than rebounding convincingly. Of May’s gain, 35,200 jobs were part-time and just 5,200 were full-time, a composition that points to firms adding flexible capacity rather than committing to permanent headcount. Hours worked fell 1.1% in the month, adding to the cautious read on underlying labour demand. The unemployment rate declined to 4.4% from 4.5% as expected, and the participation rate held at 66.7%, a touch below the 66.8% forecast.

Separate data released Thursday showed job vacancies fell 2.1% in the May quarter, the first quarterly decline since August 2025, with losses concentrated in finance, accommodation and food services. Private sector vacancies dropped 1.4% and public sector vacancies fell 7.9%, leaving total vacancies at 329,500, down 2.1% on a year earlier.

The clearest hawkish surprise in Thursday’s package came from household spending, which jumped 1.3% in May against a 0.5% consensus forecast, reversing April’s 1.1% decline. Annual growth accelerated to 5.5% from 4.9%, well above the 4.3% estimate. Transport led the gains, with clothing and dining out also contributing, suggesting the April softness reflected the war-related travel disruption the major banks had flagged rather than a deterioration in underlying consumer confidence.

For the RBA, the data leaves the August decision finely balanced but tilted toward a hold. The unemployment rate at 4.4% removes the acute pressure that a miss would have generated, the part-time composition and hours worked data give the board cover to wait for cleaner signal, and the sharp April revision reinforces the noise-in-the-data narrative. The strong household spending print and the persistence of core inflation above target keep Westpac’s August hike call alive, but the consensus view of an on-hold decision appears intact. The June CPI release, due before August’s meeting, remains the next pivotal input.

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This article was written by Eamonn Sheridan at investinglive.com.