In May Australian unemployment dropped to 10.9% – however, this was due to people leaving the workforce rather than finding jobs
In May 2025, Australian ‘real’ unemployment dropped 65,000 to 1,715,000 (down 0.3% to 10.9% of the workforce). However, the fall in unemployment is not the ‘feel good’ story one might think it is – the drop in unemployment was not because people looking for work found jobs, it was due to people looking for work giving up and leaving the workforce.
In fact it’s all about contraction in the Australian workforce.
Roy Morgan estimates the overall workforce size (which adds together both the employed and unemployed) at just over 15.7 million in May – 15,740,000 to be exact, down 206,000 on a month ago and representing 68.3% of Australians aged 14+. This is the smallest estimated workforce so far this year and the largest monthly workforce contraction since October 2021 – nearly four years ago.
The contraction in the workforce led to key employment indicators falling in May including fewer people employed full-time, fewer people employed part-time and fewer people unemployed and looking for work. There were also fewer people under-employed and looking for more work. This is the first time since January 2022 all four of these key indicators dropped in the same month.
Roy Morgan estimates just over 14 million people were employed in May – 14,025,000 to be precise. That’s down 141,000 from a month ago – and it’s the lowest level of employment for over 18 months since November 2023. This represents 60.8% of Australians aged 14+.
The conclusion from these figures is a concerning one – that employment growth has weakened, and in fact gone backwards in recent months with fewer people employed and some people choosing to leave the workforce rather than continuing to look for work.
Looking forward the re-elected Albanese Government will need to prioritise getting the economy moving again, creating jobs and keeping people in the workforce.
This is crucial for productivity.
A snapshot of the Australian workforce: the % of Australians aged 14+ in May (compared to April):
- Employed: 60.8% (down 0.9% points from April 2025) – an estimated 14,025,000 (down 141,000) – lowest level of employment for over 18 months since November 2023;
- Unemployed (Looking for work): 7.4% (down 0.4% points) – an estimated 1,715,000 (down 65,000).
- Workforce: 68.3% (down 1.1% points) – an estimated 15,740,000 (down 206,000) – lowest workforce size for over six months since October 2024.
- NOT in Workforce: 31.7% (up 1.1% points) – an estimated 7,318,000 (up 298,000).
- Retired: 21.5% (up 0.3% points) – an estimated 4,965,000 (up 90,000).
- Home Duties: 4.2% (up 0.1% points) – an estimated 980,000 (up 34,000).
- Students: 3.5% (up 0.8% points) – an estimated 799,000 (up 195,000).
- Not working and not looking: 2.5% (down 0.1% points) – an estimated 574,000 (down 21,000).
The May Roy Morgan Unemployment estimates were obtained by surveying an Australia-wide cross section of people aged 14+. A person is classified as unemployed if they are looking for work, no matter when. The ‘real’ unemployment rate is presented as a percentage of the workforce (employed & unemployed).
Roy Morgan Unemployment & Under-employment (2019-2025)
Source: Roy Morgan Single Source January 2019 – May 2025. Average monthly interviews 5,000.
Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.
Traditional Roy Morgan Employment Estimates in May
- Australian workforce contracted by 206,000 in May – the largest contraction since October 2021:
In May the Australian workforce dropped 206,000 to 15,740,000 driven by decreases in both employment, down 141,000 to 14,025,000, and unemployment, down 65,000 to 1,715,000.
- Overall employment decreased for a second straight month in May:
Australian employment dropped 141,000 to 14,025,000 – a second straight monthly contraction. Overall employment is now at its lowest since November 2023. Full-time employment dropped sharply, down 112,000 to 8,982,000 and part-time employment fell by 29,000 to 5,043,000.
- Unemployment decreased in May driven by people leaving the workforce and not looking for jobs:
1,715,000 Australians were unemployed (10.9% of the workforce, down 0.3%), a decrease of 65,000 from April. The decrease in unemployment was driven by fewer people looking for full-time work, down 108,000 to 566,000. However, there were more people looking for part-time work, up 43,000 to 1,149,000.
- Overall unemployment and under-employment was down 0.4% to 20.0% in May:
In addition to the unemployed, a further 1.44 million Australians (9.1% of the workforce) were under-employed, i.e. working part-time but looking for more work, down 36,000 from April. In total 3.15 million Australians (20.0% of the workforce) were either unemployed or under-employed in May.
- Comparisons with three years ago, at the time of the last Federal Election (May 2022) show a rapidly increasing workforce driving employment growth over the last three years (2025 vs. 2022):
The workforce in May 2025 was 15,740,000 (up 1,327,000 from May 2022) – comprised of 14,025,000 employed Australians (up 781,000) and 1,715,000 unemployed Australians (an increase of 546,000).
Michele Levine, CEO Roy Morgan, says the latest Roy Morgan employment estimates for May shows unemployment (10.9%) contracting – but not because there are more jobs being created:
“The latest Roy Morgan employment estimates for May show total Australian unemployment or under-employment decreasing by 101,000 to 3,151,000 (20.0% of the workforce, down 0.4%). There were decreases in both unemployment, down 65,000 to 1,715,000 (10.9%, down 0.3%) and under-employment, down 36,000 to 1,436,000 (9.1%, down 0.1%).
“However, although this might appear to be a good thing – the decrease was not due to more jobs being created – there were fewer jobs in May than a month earlier.
“Overall employment in May fell by 141,000 to 14,025,000 – the lowest overall employment for over 18 months since November 2023. This was driven by a decline in full-time employment, down 112,000 to 8,982,000, and a drop in part-time employment, down 29,000 to 5,043,000.
“The unusual employment dynamics in May meant that all four of the key employment metrics: full-time employment, part-time employment, unemployment (people looking for work) and under-employment (people working part-time but looking for more work) – all dropped. This was the first time in over three years – since January 2022 – that all four of these indicators fell in the same month.
“Perhaps most concerningly, full-time employment has dropped to under 9 million – its lowest level for nearly two years since September 2023 – after falling in each of the past two months.
“Taken together these indicators show economic weakness with fewer jobs available and a workforce contraction. The level of workforce engagement in May – the % of Australians aged 14+ in the workforce, declined by 1.1% points to 68.3% – its lowest level for three years since June 2022.
“In addition, the share of Australians in employment fell to 60.8% of Australians aged 14+, the lowest share in employment for over four years since March 2021 – during the middle of the pandemic.
“These are not healthy figures indicative of a strong and growing economy. These trends are backed up by the most recent ABS GDP estimates for the March Quarter 2025 which showed quarterly growth of only 0.2% and annual growth of only 1.3% – both figures which indicate a per capita decline when Australia’s growing population is taken into account.
“Fortunately for the Albanese Government, they secured a comfortable re-election victory in early May and now have three years to return the Australian economy to sustainable growth and tackle the enduring problem of high labour under-utilisation.
“Looking back over the three years since the 2022 Federal Election there has been a rapid growth in population (up 1.82 million), workforce (up 1.33 million), and employment (up 781,000). However, there has also been a significant increase in unemployment (up 546,000 since May 2022).
“However, these latest figures show that the re-elected Albanese Government has a significant challenge ahead as it enters its second term developing policies to find employment opportunities for the millions of Australians looking for work (unemployed) or looking for more work (under-employed).”
This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly interviews of 954,315 Australians aged 14 and over between December 2008 and May 2025 and includes 6,100 telephone and online interviews in May 2025. *The ‘under-employed’ are those people who are in part-time work or freelancers who are looking for more work.
Contact Roy Morgan to learn more about Australia’s unemployed and under-employed; who and where they are, and the challenges they face as they search for employment opportunities.
Visit the Roy Morgan Online Store to purchase employment profiles, including for Australians who are employed, unemployed, under-employed, employed part-time, employed full-time, retired, studying and many more.
Margin of Error
The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.
| Sample Size | Percentage Estimate |
| 40% – 60% | 25% or 75% | 10% or 90% | 5% or 95% | |
| 1,000 | ±3.0 | ±2.7 | ±1.9 | ±1.3 |
| 5,000 | ±1.4 | ±1.2 | ±0.8 | ±0.6 |
| 7,500 | ±1.1 | ±1.0 | ±0.7 | ±0.5 |
| 10,000 | ±1.0 | ±0.9 | ±0.6 | ±0.4 |
| 20,000 | ±0.7 | ±0.6 | ±0.4 | ±0.3 |
| 50,000 | ±0.4 | ±0.4 | ±0.3 | ±0.2 |
