Deloitte Access Economics Employment Forecasts

24 November 2025: Australia’s once persistently low unemployment rate is steadily climbing as the government-led jobs boom slows, leaving the private sector to pick up the slack as Reserve Bank of Australia (RBA) balances maintaining full employment with keeping inflation low.

According to Deloitte Access Economics’ November 2025 edition of the Employment Forecasts report, the sector breakdown of employment growth has shifted. For the first time since December 2022, the market sector has done most of the recent heavy lifting.

This is a stark reversal of the post-COVID leap in non-market sector (health care, education, and public administration) hiring that drove more than 80% of the employment gains in 2023 and 2024. Consequently, employment growth has slowed as the labour market hits a flat patch.

Deloitte Access Economics Partner and report lead author, David Rumbens, said: “Even with 42,200 people gaining work in the month of October 2025, job gains for the last six months have totalled just 81,500 workers. This compares to 151,300 people finding work in the six months prior.

“This is a concerning trend and shows just how steep the slowdown in hiring has been for the labour market. When measured in annualised terms, employment growth in the six months to October 2025 was just 1.1%, well below the annualised rate of 2.1% in the six months prior.

“This slowdown in non-market sector employment is likely a result of governments across Australia pursuing fiscal restraint. While this poses ongoing risk to the labour market, it is likely a temporary setback as industries such as health care remain fundamentally strong, and hiring is expected to rebound.

“However, the current labour market flat patch poses a conundrum for the RBA, which now faces the challenge of maintaining full employment and keeping the inflation rate within the 2-3% sustainable band. With inflation once again outside of the target range, the macroeconomic landing is looking a little harder than first thought.”

Deloitte Access Economics expects the Australian labour market to remain soft through the first part of 2026, before picking up speed as the private sector economic recovery continues.

The improvement in the labour market is contingent on the broader economic recovery. The Australian economy is likely to see a moderate acceleration over the coming quarters underpinned by ongoing real wage growth, earlier interest rate cuts and an uplift in private sector activity. This may provide some renewed labour market momentum through 2026.

How does that play out by broad worker classification?

• The human services workforce is expected to grow by 2.9% (157,000 workers) in 2025-26 and 1.6% (88,300 workers) in 2026-27. Workforce growth is expected to be supported by health care and education, alongside consumer-facing industries as household spending picks up.
• The white collar workforce grew by just 0.8% (43,900 workers) in 2024-25, the slowest year for white collar jobs growth in a decade. Many large companies have right-sized their workforce amid a slowdown in economic activity. White collar workforce growth is expected to nudge upward to 0.9% (49,200 workers) in 2025-26, before accelerating to 1.5% (79,300 workers) in 2026-27 as stronger economic activity and hiring resumes.
• The blue collar workforce is anticipated to decline by 0.3% (12,800 workers) in 2025-26. Broader weakness across the industrial, agriculture, wholesale and administrative sectors is anticipated to constrain growth in the current financial year. Hiring is set to resume in 2026-27 as residential construction activity lifts and transport sector hiring continues.

CBD employment growth to bounce back

Despite challenging conditions across the broader labour market, employment growth across Australia’s CBDs is expected to pick up in the year ahead. This recovery is anticipated to be underpinned by stronger consumer spending, higher credit demand and improving business profitability.

Rumbens said: “Brisbane Near City is expected to experience the strongest employment growth across all CBD markets in 2025-26, with strong growth forecast across the health and education industries. Meanwhile, employment growth in Melbourne CBD is expected to outpace the national average over the coming financial year, supported by a rebound in financial services hiring and improving consumer spending.”

Move over house prices - the impact of AI on the workforce is the new barbecue stopper

Understanding the impact of AI on the Australian labour market is a central question for policymakers and organisations. While interest in this topic has grown rapidly, the evidence remains mixed and incomplete.

Rumbens said: “Early evidence in the US suggests that junior employment levels have declined within firms that have been bigger adopters of AI compared to those where AI is playing less of a role. And that early-career workers have experienced a decline in employment across AI-exposed occupations, even after controlling for firm-level characteristics.”

To examine the effects of AI on the Australian labour market, Deloitte Access Economics has identified 37 occupations that are most likely to be disrupted by AI. Following the approach taken by emerging research, disruption is assessed based on the extent to which an occupation’s core tasks can be automated versus the necessity for human performance.

Rumbens added: “Our research finds that AI-disrupted occupations are experiencing weaker labour demand than other occupations. However, this has been the case for at least a decade and, at this stage, does not demonstrate any impact of AI on the Australian labour market.

“Given the scale and speed of current investment in AI, labour-market impacts – both disruptive and augmentative – could appear sooner than in previous technological cycles, particularly for the segments of the labour market that are most likely to be disrupted by AI. The Australian government will play a role here as it provides greater assurance on future AI policy and regulation.”

Employment Forecasts is released quarterly and provides forecasts and commentary for each industry and occupation, plus white collar, blue collar and human services employment. There are three levels of data available: state, city and CBD. Employment Forecasts is particularly useful in the analysis of property market demand.