The unemployment rate returned to 3.7 per cent last month, up from 3.6 per cent in September, according to seasonally adjusted jobs figures released by the Australian Bureau of Statistics on Thursday.

The increase, which was in line with economists’ expectations, was due to an uptick in the participation rate – measuring the proportion of the working-aged population who are working or looking for work – which rebounded to a record high of 67 per cent, up from 66.8 per cent.

The proportion of workers who were looking for additional hours, measured by the underemployment rate, also held steady at 6.3 per cent.

The majority of new jobs created were part-time, up 37,900, while full-time roles increased by 17,000.

Concerns of ‘turning point’ in jobs market

In recent communications, the Reserve Bank has noted that the jobs market has reached a “turning point”, as the supply of workers has increased while demand has moderated.

As a result of its aggressive run of interest rate increases, which have risen by 425 basis points since May last year, the central bank expects the economy will slow, pushing the unemployment rate to 3.8 per cent by the end of 2023, rising to 4.25 per cent by the end of 2025.

“Conditions in the labour market have eased but they remain tight,” RBA governor Michele Bullock said in a statement accompanying the board’s rates decision earlier this month.

ABS head of labour statistics Bjorn Jarvis said “the large increase in employment in October followed a small increase in September of around 8000 people”.

“Looking over the past two months, these increases equate to average employment growth of around 31,000 people a month, which is slightly lower than the average growth of 35,000 people a month since October 2022,” Mr Jarvis said.

A rise in the number of hours worked, which edged up by just 0.5 per cent in October, was evidence that Australia’s red-hot jobs market was beginning to cool, Mr Jarvis said.

“The recent slowdown in the growth of hours worked may suggest that the labour market is starting to slow, following a particularly strong period of growth,” he added.

The fresh jobs data follows the release of new wages growth figures that revealed pay packets rose by a blistering 4 per cent in the year to September – the highest rate since 2009.