Manpower recruited for the federal election and a fall in the number of people looking for work has seen the unemployment rate drop to a four-month low.
The unemployment rate fell to 5.6 per cent in September, the Australian Bureau of Statistics said, beating economists' expectations of 5.8 per cent.
The number of people with jobs rose 9,100 while the participation rate - the proportion of the population that have a job, are looking for work or ready to start work - fell to 64.9 per cent, down from 65.0 per cent in August.
The fall in the participation rate, as well as the creation of jobs for the federal election (operating polling booths etc) nudged unemployment lower, National Australia Bank senior economist David de Garis said.
"The employment numbers last month and this month have been flattered somewhat by the election," he said.
"That unemployment rate probably isn't going to be fuel for any talk of a rate cut, next month anyway, unless the consumer price index is really low."
The September CPI will be released by the ABS on October 23.
Commonwealth Bank senior economist Michael Workman puts the lower unemployment rate down to the fall in the participation rate.
The proportion of the population that have a job, is looking for work or ready to start work fell to a seven-year low of 64.9 per cent in September.
"Employment growth is just not enough to cover the number of new entrants into the work force," he said.
"Generally the unemployment rate should be rising, it's just this oddity with the participation rate in this survey that is producing an unemployment rate that is not going to six per cent yet, but is most likely to get there in the next quarter or two."
Mr Workman said he expect the unemployment rate to start stabilising in the first half of 2014 and then to trend downwards.
He says the chance of the Reserve Bank of Australia cutting the cash rate this year is quite unlikely and the chance of a reduction next year is unclear.
"It really depends on how high the unemployment rate gets over the next few quarters on whether the RBA goes again," he said.
ANZ head of Australian economics Justin Fabo said the September unemployment rate is consistent with the stabilisation of other employment market indicators.
"Jobs ads measures have increased modestly recently and firms have reported that the level of spare capacity in their businesses has reduced a little over the past few months," he said.
"Today's data and the slight improvement in the suite of other labour market indicators are consistent with the RBA being on hold for several months."
Mr Fabo said ANZ has changed its forecast for the RBA's cash rate.
"Until last week we had pencilled in a rate cut for November but pushed this out to February next year," he said.
"The recent improvement in confidence and stabilisation in labour market conditions is welcome but is still only tentative evidence that economic activity is improving from below-trend rates rather than just stabilising."
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