Australia’s once-booming job market is losing momentum. After years of solid gains driven by public sector hiring, the pace of new employment has slowed sharply, leaving economists warning that the private sector must now carry the weight. It’s a turning point — and not one without concern.
Job Creation Losing Steam
According to Deloitte Access Economics’ November 2025 Employment Forecasts, the country added just 81,500 jobs over the past six months — a significant drop from the 151,300 created in the previous half-year. For the first time since late 2022, most new roles are coming from market-driven industries rather than government initiatives.
On paper, that might sound like a normal shift, but in reality, it signals a worrying slowdown. “Even though 42,200 people gained work in October, the trend is clearly down,” said David Rumbens, a partner at Deloitte Access Economics. “It shows how steep the slowdown in hiring has been”, reports Finnewsnetwork.
This decline marks a clear end to the post-COVID public sector boom that had propped up employment growth. With government projects winding down and consumer spending still cautious, private companies are being pushed into the spotlight to fill the gap.
A Tale of Two Workforces
Deloitte’s data shows that not all sectors are feeling the pinch equally. White-collar employment — roles in business, finance, and technology — grew just 0.8% in 2024–25. Blue-collar jobs, meanwhile, are expected to decline by 0.3% in the coming year, as construction and manufacturing sectors face soft demand and rising costs.
There’s one bright spot: human services. Jobs in health care and education are forecast to grow 2.9% in 2026, supported by strong population growth and aging demographics. Deloitte also expects employment in central business districts like Brisbane and Melbourne to recover as consumer spending and business profitability improve.
Still, the overall trend suggests that growth is cooling across the board. “The list of people looking for work is growing again,” Rumbens said, “and that’s always a red flag for the economy.”
A Balancing Act for the RBA
The slowdown places the Reserve Bank of Australia (RBA) in a tough spot. It must strike a delicate balance between curbing inflation and supporting employment — two goals that don’t always move in the same direction. A sudden drop in job creation could ease wage pressures, but it also risks slowing consumer confidence and spending just as the economy needs momentum.
Adding to the uncertainty is the rise of artificial intelligence (AI). While AI promises efficiency, it also threatens to automate entry-level and junior roles. Deloitte’s report warns that its impact may come faster than expected, mirroring early trends in the United States.
What’s Next for Australia’s Labour Market?
For now, economists agree that the private sector will be crucial in sustaining job growth. Businesses, particularly in tech, care, and renewable energy, are expected to play a larger role in driving employment forward. But without stronger investment and productivity gains, it’s unlikely the job market will regain its previous pace anytime soon.
After several years of robust hiring, the Australian labour market may be entering a more cautious phase — one where the focus shifts from quantity to quality. For workers, that could mean tougher competition for fewer opportunities, and for policymakers, it’s a reminder that job creation doesn’t happen on autopilot.
