It isn't the start the Turnbull government would have been hoping for in this election year with the jobless rate unexpectedly jumping to six per cent.
Economists had predicted the jobless rate staying at a seasonally adjusted 5.8 per cent, but Thursday's January figures showed it rose to its highest level since Malcolm Turnbull rolled Tony Abbott for the prime ministership last September.
As the prime minister's latest frontbench team was sworn in by the governor-general, labour-force figures also showed the number of people in employment fell by 7900 in January, and would have been worse if not for a rise in part-time workers.
Full-time employment tumbled by 40,600 while those in part-time work rose by 32,700.
Employment Minister Michaelia Cash tried to play down the jobless rate rise, pointing to the improvement in trend numbers.
The trend figure eased to 5.8 per cent from 5.9 per cent.
"When you look at the overall trend, we are still heading in the right direction," Senator Cash told reporters in Perth on Thursday.
Economists and financial markets nearly always follow adjusted figures that smooth out seasonal factors.
Opposition Labor employment spokesman Brendan O'Connor said it was clear the government had no plans in terms of jobs growth.
"We have a prime minister and a treasurer that is all talk, in fact I think they are in a waffling competition and the treasurer is coming a close second ... all talk, no action, no jobs plan," he told reporters in Adelaide.
ANZ economist Justin Fabo saw the overall result as a statistical correction to the previous unexpectedly strong figures.
"Just as the super strength in employment over most of 2015 overstated the improvement in labour market conditions, the falls in employment in December and January should not be interpreted as the labour market hitting a wall," he said.
The figures came as a think tank says Australia is unlikely to face a recession in 2016 but weak national income poses risks to the economy.
In its 2016 economic and political outlook, the Committee for Economic Development of Australia says falling commodity prices will impact how income weakness plays out, while business confidence is unlikely to improve with the politicking in this election year.
"This has the potential to have serious implications for the economy," CEDA chief executive Stephen Martin said.
He predicts the Turnbull government will be re-elected, albeit with a reduced majority.
"Business confidence in the current government, of which there were high expectations, appears to be wavering," Prof Martin says.
"The prime minister's focus on Australia being agile and innovative has been the right messaging but it is failing to translate into positive action."
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