Underemployment and underutilisation 'u-series', June 2026

Preliminary headcount and hours-based measures of labour underutilisation covering underemployment, unemployment and the potential labour force

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Released
31/07/2026
Source
Labour Force, Australia, June 2026
Underemployed workers, February 2026
Participation, Job Search and Mobility, Australia, February 2026
Release date and time
31/07/2026 11:30am AEST

Background

This article provides updated u‑series labour underutilisation estimates, for June 2026. This follows on from the article released alongside the February issue of Labour Force, Australia which introduced the 'u-series', and subsequent updates for March, April and May. The u-series provides a new and more contemporary and conceptually coherent framework for underutilisation statistics.

The original article remains the primary reference for information on the concepts and measures, underlying framework, u-series derivations, backcasting methods and assumptions used to produce historical estimates.

This preliminary u-series data is currently released as a companion to the headline estimates published in Labour Force, Australia, published as an article on a monthly basis the week after Labour Force, Australia. The u-series will be fully implemented in late 2026 or early 2027 (including extending the time series back to 1978). Until fully implemented, official underemployment estimates remain those published in Labour Force, Australia. More detail on implementation plans will be provided over the coming months.

Headline u-series

A set of preliminary estimates and charts displaying the ‘headline’ u-series measures up to June 2026 are provided below. The data presented may be subject to change as a result of further refinements to the method, including improvements to the compilation and backcasting method. In this release, refinements have been made to the seasonal adjustment approach of the u-series, including COVID-19 corrections.

In seasonally adjusted terms, in June 2026:

  • The u-series underemployment rate (UD-1) was 4.2%
  • The u-series reduced employment rate (RE-1) was 2.4%
  • The unemployment rate (UN-1) was 4.4%
  • The u-series labour force underutilisation rate (UU-1) was 10.2%

Chart 1 shows trend and seasonally adjusted headline u-series headcount rates from March 2025 to June 2026. While underemployment and unemployment remained relatively stable over this period, reduced employment experienced a peak in March 2025, in part due to impacts from Cyclone Alfred, before stabilising at lower levels.

  1. Persons may be classified in both Reduced Employment (RE) and Underemployment (UD). As a result, summing RE and UD headcounts will double-count persons classified in both categories.

Charts 2 to 5 show seasonally adjusted data for the four level 1 headline series – on both a headcount and hours basis, and as rates – for the period July 2014 to June 2026.

Chart 2 shows that in June 2026 there were 363,000 employed people who worked reduced hours for economic reasons, and 623,000 employed people who were underemployed (that is, they prefer, were available and actively looked for more hours). There were 88,000 people who worked less hours than usual in the reference week but also preferred more hours than usual (so are included in both the UD and RE estimates), so the total number of underutilised employed people in June 2026 was 898,000. There were also 690,000 unemployed people. Total underutilisation was around 1.59 million people.

  1. Persons may be classified in both Reduced Employment (RE) and Underemployment (UD). As a result, summing RE and UD headcounts will double-count persons classified in both categories.

Chart 3 shows that the reduced employment rate (the proportion of employed who worked reduced or no hours for economic reasons) in June 2026 was 2.4%, and the u-series underemployment rate (the proportion of employed who prefer, were available and looked for more hours) was 4.2%. The combined underutilisation amongst the employed population was 6.6% (the sum of the components does not equal the total as there are people who are simultaneously working less hours than usual and prefer more hours than usual).

This compares to an unemployment rate in June 2026 of 4.4%. The total u-series labour force underutilisation rate was 10.2%.

  1. Persons may be classified in both Reduced Employment (RE) and Underemployment (UD). As a result, summing RE and UD headcounts will double-count persons classified in both categories.

Charts 4 and 5 provide volume, or hours-based, estimates of the key u-series groups, showing the total number of ‘hours not worked’ by underutilised people. In June 2026 there were just under 32 million hours of available but unused labour supply, which results in volume rates of reduced employment (0.8%), underemployment (1.4%), unemployment (3.7%) and labour force underutilisation (5.8%).

Joblessness

Chart 6 shows seasonally adjusted UN-series headcount rates from July 2024 to June 2026. While the four UN series exhibit similar trends over time, differences in job search and availability requirements demonstrate how broader definitions of available labour supply can produce different labour market signals. For example, in May 2026, the UN-1 (unemployment) rate decreased from 4.5% to 4.4% and the UN-2 rate remained steady at 5.6%. Both measures require a person to have looked for work in the last 4 weeks. In contrast, in May 2026, the broader UN-3 and UN-4 measures increased, from 6.8% to 7.1% and 8.2% to 8.5% respectively. This reflects the growth in the population who wanted to work and were available but did not necessarily look for work during the previous 4 weeks. In June, these broader groups then declined slightly.

States and territories

Chart 7 shows the rates for each level in the UN-series by state and territory for June 2026. The different u-series levels show that as the job search activity and/or availability criteria are relaxed there are differing impacts across states.

Age

Chart 8 shows the rates for the RE-1 series by age group. Reduced employment tends to be highest among those aged 15-24 years, followed by those aged 55 years and over. Other age groups exhibit comparatively similar rates at lower levels than both the oldest and youngest age groups. Higher rates of reduced employment among younger people reflect their greater propensity in working casual roles with variables hours. Consequently, shocks like COVID-19 can have a disproportionate impact on reduced employment for those aged 15-24 years.

Sex

Chart 9 shows the rates for the RE-1 series by sex. Reduced employment tends to be highest for males as they have a greater propensity to have their working hours reduced due to economic reasons.

Chart 10 shows the rates for each level in the UN-series by sex for June 2026. While UN-1 (the unemployment rate) is higher for men, as the job search activity and availability criteria are relaxed, the UN rates are higher for women.

u-series spreadsheets

The spreadsheets below include level estimates and associated rates for each measure in the u-series in original, seasonally adjusted and trend terms for the period July 2014 to June 2026. 

While seasonally adjusted and trend data are included here, note that standard Labour Force Survey time-series adjustments (including applying trend breaks, where applicable) have not yet been applied.

u-series

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Data files

Further information

If you have any questions on the u-series or would like to provide feedback, please email labour.statistics@abs.gov.au.