For HR leaders navigating workforce planning, the data adds a new layer of complexity to an already shifting environment. After years of record-low vacancies driving competition for talent, the cooling trend signals that the balance of power between employers and candidates may be gradually shifting.
Unemployment dips, but underemployment ticks up
On the employment side, the picture was more encouraging. The seasonally adjusted unemployment rate fell 0.1 percentage points to 4.4 per cent in May 2026, with the number of unemployed Australians dropping by 18,300 to 671,300 people, according to the ABS Labour Force data released simultaneously.
Total employment rose by 40,300 people to reach 14,738,800. Full-time employment grew by 5,200, while part-time employment increased by 35,200 – a split that HR teams in industries reliant on flexible staffing will be watching closely.
Crick attributed the improvement in unemployment partly to the clearing of a hiring backlog. “Over the past few months, we have recorded higher proportions of unemployed people waiting to start jobs who then remained unemployed in the following month. The backlog of people waiting to start a job has eased in May, contributing to the 40,000 rise in employment and 18,000 fall in unemployed persons.”
However, the underemployment rate – a measure of people who have work but want and are available for more hours – rose 0.1 percentage points to 5.9 per cent in seasonally adjusted terms. For people managers, underemployment is often a more meaningful indicator of workforce capacity and employee wellbeing than headline unemployment figures alone.