State and territory labour market divides deepening

Plentiful jobs and the high cost of living have people piling into the workforce though official labour force data hints at uneven performance across regions and industries.

The September labour force report revealed an economy creating jobs fast enough to meet the supply of new workers, keeping the labour market balanced and the unemployment rate steady at 4.1 per cent.

Some states were doing better than others, however.

National Australia Bank head of market economics Tapas Strickland observed "clear divergence" between states, with Victoria's 4.4 per cent jobless rate well above the 3.8 per cent rate in NSW.

Western Australia and the Australian Capital Territory joined nation's most populous state with the only other unemployment rates below four per cent.

KPMG chief economist Brendan Rynne highlighted the prominence of the public sector in Australia's strong job creation.

The non-market sector, which includes education and health care, accounted for more than 80 per cent of additional labour demand in the September quarter, according to his analysis.

Even with "relative weakness" in the private-sector jobs market, Dr Rynne expected the Reserve Bank of Australia to keep interest rates on hold until early 2025.

The central bank might face additional headwinds in housing inflation as vacancy rates fall for a third month in a row.

Friday's figures from PropTrack showed the national rental vacancy rate sinking another 0.06 of a percentage point to 1.34 per cent.

REA Group senior economist Anne Flaherty said the easing rental conditions observed in the first half of 2024 appeared to have ended.

"In unwelcome news for renters, market conditions deteriorated further in September, with vacancies down in both capital city and regional areas," Ms Flaherty said.