Job numbers increase chance of rate cut

A slight rise in unemployment and subdued wage growth suggests the Reserve Bank will cut rates next month.

The number of job vacancies has risen to the highest level since May 2012. (AAP)

The sluggish labour market has increased the chance of an interest rate cut next month.

Australia's unemployment rate rose to 5.8 per cent in June, even as the number of people with jobs rose by 7,900.

The number of part-time jobs fell by 30,600, but that was offset by 38,400 full time jobs being created.

HSBC chief economist Paul Bloxham said the figures showed the labour market was in a holding pattern.

"Employment growth is solid, but only just enough to offset growth in the labour force, meaning that the unemployment rate is holding steady at around 5.7-5.8 per cent," he said.

"The labour market still has spare capacity, which is keeping wage growth subdued across the country."

Royal Bank of Canada analyst Michael Turner said persistent slack in the labour force pointed to ongoing weakness in wage growth and muted underlying inflationary pressures, which the Reserve Bank was focused on bringing back into its two to three per cent target band.

But he said a single employment report is typically not be enough to trigger a rate cut.

"Yet, the unemployment rate has struggled to move lower in recent months, which does at least provide a necessary condition for further easing," he said.

"The sufficient condition remains a suitably benign inflation report, due July 27. We continue to see this scenario unfolding and look for a 25 basis point interest rate cut in August."

Meanwhile, Commonwealth bank senior economist Gareth Aird noted that the ABS had rotated a new group of 3,250 households into its sample for the June jobs report.

The impact of the rotation was negative for both levels of employment and the number of full-time workers in the statistics, he said.

"Yet despite this, the overall level of employment lifted in June and number of full-time workers rose," Mr Aird said in a note.

"To us, that suggests a stronger underlying pulse of job creation that today's headline numbers imply."