Australia has received its latest unemployment figures after April’s shock jump to a five-year high that economists branded an “ugly” reading. Australian Bureau of Statistics data shows unemployment decreased to 4.4 per cent, with 18,300 more unemployed people, but 40,300 extra people now in the workforce.Thursday’s figures followed unemployment rising to its highest level in five years in April at 4.5 per cent. It wasn’t all good news for households. The ABS reported that in April there were more people waiting to start a job who were unemployed. Hours worked also slipped 1.1 per cent in May, largely due to Australians playing catch-up from not taking leave in April.But better news on the jobs front could ultimately hurt households, with BDO chief economist Anders Magnusson warning the figures could ultimately hit cash-strapped mortgage holders. “The Reserve Bank is now facing the combination it has been trying to avoid, broader inflation pressures alongside a labour market that remains too tight to ease them,” he said.“As long as businesses continue to compete for workers while passing on higher costs, the path back to the inflation target becomes more difficult. Today’s figures significantly strengthen the case for an August rate rise.” KPMG chief economists Brendan Rynne warned households that Thursday’s jobs figures added to the case for a rate hike sooner rather than later. VanEck head of investments and capital markets Russel Chesler said the next inflation print would be critical.“If employment remains resilient and consumers continue spending despite weaker growth and lower savings, the RBA may have little choice but to tighten again. This is not an economy rolling over, it is an economy sending mixed signals at exactly the wrong time,” Mr Chesler said. The stronger than expected jobs figures followed the RBA holding the official cash rate on hold at 4.35 per cent after last Tuesday’s meeting. Despite the overall stronger-than-expected figures, Indeed APAC economist Callam Pickering pointed out it could be the calm before the storm. “Nevertheless, the job market will continue to feel pressure over the coming months, as the economy deals with the combination of high inflation and rising interest rates,” he said. “The latest job figures appear solid at first glance but are weaker beneath the surface.“Employment growth has been sluggish this year – after also being sluggish last year – and the rest of the year will be quite challenging.”In 2026, the cash rate has gone from 3.60 to 4.35 per cent, with the previous three 0.25 per cent increases adding about $342 to monthly repayments on the average loan of about $736,000 or an extra $4128 a year.If the RBA increases rates for a fourth time, Compare the Market suggests it would lump mortgage holders with another $114 in average monthly repayments. Combined with the earlier hikes, that would add $5472 to costs over the year.The RBA will be closely watching Thursday’s figures as it has a dual mandate of keeping inflation between 2 to 3 per cent while also maintaining full employment. Unemployment matters to central banks because it is an indicator of the economy’s health and directly impacts inflation. Following a two-day meeting in May, the RBA announced it had lifted the cash rate by a further 25 basis points, its third straight rise to start the year.The cash rate has gone from 3.60 to 4.35 per cent in the five months until May.Prior to Thursday’s jobs figures, markets were expecting 30,000 Australians to enter the workforce but the unemployment rate to remain at 4.5 per cent. Household spending ralliesHelping to lift the jobs market was a surprise return to the shops from many Australians. Separate ABS figures found household spending rose 1.3 per cent in May following falls of 1.1 and 1.7 per cent in April and March respectively. This smashed forecasts of a 0.5 per cent rise, partially driven by airfare refunds returning to normal after falling a lot in April from the Middle East conflict.AMP deputy chief economist Diana Mousina said Thursday’s jobs and spending data pointed to the economy still being inflationary.“Jobs growth is holding up relatively well and the unemployment rate is low, which is consistent with ongoing solid wages growth,” she said.“Good employment outcomes keep household income elevated, which is lifting consumer spending despite the challenges with higher energy and other prices. “Despite consumers saying that they feel concerned about the outlook and cost-of-living challenges, their spending habits tell a different story.”Ms Mousina said this would lead to a more hawkish RBA and a likely rate hike as soon as August.Money markets are now backing a 70 per cent chance of further rate hike pain in August. Chalmers welcomes 40,000 new jobsIn a statement after Thursday’s jobs figures were announced, Treasurer Jim Chalmers welcomed the fall in unemployment.He called it a welcome reminder of the economy’s resilience in the face of global uncertainty. “It means more than 1.25 million jobs have now been created on our watch, most of them full-time,” he said. “This Albanese Labor government has overseen the lowest average unemployment of any Australian government in the last half a century.”