What’s happening: The Australian labor market missed its seasonal stimulus in December 2025, marking a sharp departure from typical year-end trends. Retail and hospitality, sectors that typically drive demand in December, instead recorded a monthly decline of 1.7%.
Why this matters: December is traditionally a crucial earning month for younger Australians, who rely on more casual services and seasonal income.
The Australian labor market went on holiday at the beginning of 2025. According to Employment Hero’s December Jobs Report, the usual year-end workforce surge never materialized, causing employers to cut hours and leave young workers in hot water.
The data paints a picture of caution rather than celebration. The average number of hours worked decreased by 1.5% on a monthly basis, 1.0% on a quarterly basis and 1.3% on an annual basis. Compare that to December 2024, when hours were largely positive, up 0.9% month-over-month and 1.1% year-over-year.
The decline is particularly strong in sectors that are based on seasonal demand. Even the retail and hospitality sectors, which typically drive the holiday surge, recorded a 1.7% month-on-month decline. Casual employment continued to rise year-on-year, but average hours off fell sharply, indicating shorter schedules rather than fewer workers.
Total employment fell 0.2% month-on-month, despite rising 6.5% year-on-year, while average wages rose across the board. Yet this headline figure masks a worrying trend: wages fell month on month for workers under 45, increasing pressure on younger Australians who rely on December services.
Young employees are the victims
The decline was most pronounced among the younger age groups. For employees aged 18 to 24, the average number of hours fell by 6.1% on a monthly basis and by 4.5% on an annual basis. The 25 to 34 age group saw a decline of 1.9% month-on-month and 1.4% year-on-year.
Average wages also fell. The 18 to 24 age group experienced a 2.0% month-on-month decline, while the 25 to 34 year-old cohort declined 1.3% month-on-month.
“It appears the Australian labor market went on holiday in early 2025, with December’s pattern looking more like what we normally associate with January,” said Tasman Page, spokesperson for Employment Hero. “Our data suggests that employers are bracing for a softer festive season, pulling back hours, pausing hiring and tightening wage growth rather than leaning on the usual December demand. Even in traditionally busy sectors such as retail and hospitality, schedule reductions have replaced schedule increases. The impact has been greatest on younger workers, who rely heavily on end-of-year shifts; many saw their hours and revenues fall just as costs peaked.”
Why December fell short
Rising inflation, persistent cost pressure and a prolonged interest rate pause appear to be burdening both employers and consumers. Companies entered the month with higher labor costs and tighter margins, while households reined in their discretionary spending.
“Businesses entered December more cautiously than usual, with higher labor costs and tighter margins, while households reined in discretionary spending,” Page explains. “The result was fewer shifts and smaller wage increases at a time of year that usually provides a buffer on the way to a seasonal cooldown. The environment is tough, but entrepreneurs are doing their best with the cards they have been dealt.”
The challenge now, Page noted, is navigating a softer demand cycle without putting too much pressure on employees who are already struggling.
Where the jobs are
While parts of the labor market deteriorated, other areas remained solid. For Australians looking for secure or well-paid work in 2026, several roles stand out.
The highest-paying positions (based on average hourly wages) include Station Hand on a Farm ($187.30), General Practitioner ($155.30), Construction Manager ($98.70), Engineering Manager ($97.20), and Growth Manager ($93.80). These figures exclude C-level, senior and partner roles.
For those willing to work longer hours, local driver roles average 179.60 hours per month, mining engineer 171.20 hours, construction worker 170.9 hours, geologist 161.1 hours and auto electrician 160.9 hours.
Job security is another measure of stability. The positions of security officer, software developer, accountant, sales manager and community support worker recorded the lowest turnover, indicating that employees in these positions are more likely to stay in their positions.
For more information about the jobs report, visit Employment Hero Jobs Reports.
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