Lowest unemployment rate since Whitlam under Albanese

Unemployment has been lower under Anthony Albanese's government than any prime minister since Gough Whitlam, with more promising jobs data expected.

Australian Bureau of Statistics figures on Thursday are tipped to show the jobless rate holding at 4.1 per cent in February.

While above the 3.4 per cent low recorded in October 2022, that's still well below the historical average of 6.3 per cent since 1972.

Labor-aligned think tank the McKell Institute found the unemployment rate has averaged 3.8 per cent since Anthony Albanese was elected.

"A low unemployment rate is not just some abstract number, it is fundamental to the success of individuals and societies," said institute chief executive Ed Cavanough.

Despite high population growth, the labour market has remained remarkably tight with a record participation rate and healthy growth in full-time work revealing historically low underemployment.

That has contributed to wages growing again in real terms, accounting for the effects of inflation.

"For three years, Australians have been told that industrial relations reforms were going to smash jobs," Mr Cavanough said

"The data suggests the opposite is true."

It may be correct that workplace protections such as 'same job same pay' laws and multi-employer bargaining have not caused unemployment to skyrocket, but Labor cannot take all the credit.

Unemployment was already trending down under the coalition with Mr Albanese inheriting a jobless rate of 3.9 per cent in May 2022, down from the COVID-impacted peak of 7.5 per cent in July 2020.

Labor has also been accused of artificially tightening the labour market by overseeing a massive expansion in non-market sector jobs, such as healthcare and education, which has made it harder for other industries to find workers.

"The economy right now is being led by public spending and immigration when we need an economy that is led by the private sector and is delivering for Australians," shadow treasurer Angus Taylor said in December.

Economists at NAB and JP Morgan think Thursday's print will show the unemployment rate dived ever lower to four per cent, unwinding an unusually large seasonal uplift in people attached to a job but waiting to start work in January.

Reserve Bank governor Michele Bullock has cited labour market tightness as a reason for not needing to lower interest rates earlier, as central banks in peer economies had done.

"For the RBA, we don't think a slight fall in the unemployment rate in February will change the chances of a rate cut in May much," said JP Morgan's Ben Jarman, Tom Kennedy and Jack Stinson in a research note.

"The larger question for the bank right now is the sensitivity of prices/wages to the unemployment rate, which demands the labour market data be assessed with reference to the data on prices/wages."

The RBA will have to wait until the April 30 quarterly CPI print to find out whether inflation has continued to moderate, despite the low unemployment rate, meaning an April 1 rate cut is probably off the cards.