Jobs growth slows in December but labour market remains tight: CBA
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The news: Jobs growth slowed in December 2025 but the labour market remains tight, supporting the case for the RBA to lift the cash rate this year, according to de-identified bank account data analysed by Commonwealth Bank (CBA).
The numbers: The latest CBA Wage and Labour Insights data indicates that 23,000 jobs were added in December, lower than the 26,000 added in November but “broadly in line with previous months”, the bank said.
The bank flagged that the unemployment rate remains at 4.3%, which reflects a “labour market that is on the tighter side.
Wages rose 0.8% in the quarter to December and 3.1% over the year. This is broadly in line with the 0.8% rise in the quarter to November and 3.2% over the year to November.
The context: CBA head of Australian economics Belinda Allen said the bank’s data highlights “the labour market remains tight with limited spare capacity contributing to inflation that is still too high”.
Allen also flagged the bank’s expectations that wages growth and the unemployment rate will both stay at current levels for the rest of 2026.
However, she told Capital Brief that the latest CBA insights data "hasn't told us anything too new about what's happening in wages growth and the labour market in the Australian economy" and Commonwealth Bank still expects the RBA to hike the cash rate in February 2026.
"This year it looks like the economy...is generating inflationary pressures, but we don't see it generating more than what is warranted by one rate hike," Allen said. However, she acknowledged that there are still two important data prints due before the RBA monetary policy board's next meeting.
The Australian Bureau of Statistics will release labour force data for December on 22 January and consumer price index data for December on 28 January.
What they said: “As we move into 2026, we’ll be watching closely for any shifts in wage momentum or hiring activity. Our data gives us an early read on the labour market, and right now it’s clear that resilience remains a defining feature, even as economic conditions evolve,” Allen said.
The source: Commonwealth Bank Wage & Labour Insights report
