The federal government can breathe a sigh a relief after the jobless rate dropped to 6.1 per cent in August.
The decline was larger than economists expected and came after the surprise spike to a 12-year high of 6.4 per cent in July.
A staggering 121,000 jobs were added to the economy in August, according to data released on Thursday, although only a small proportion encompassed full-time work.
The number of full-time workers increased by 14,300, while part-time workers jumped by 106,700.
Changes to the way the Australian Bureau of Statistics collects the data could be behind the recent sharp swings in the labour force figures.
Economists generally expect the unemployment rate to remain above six per cent for a while yet.
Reserve Bank governor Glenn Stevens has indicated that while he would like to see a faster reduction in unemployment, he isn't about to fuel already elevated house prices in some parts of the country by cutting the cash rate further.
Unemployment rates fell in all states in August, declining to 5.7 per cent from 5.9 per cent in NSW.
In Victoria unemployment eased to 6.8 per cent from seven per cent, it fell to 6.7 per cent from 6.8 per cent in Queensland and tumbled to 5.9 per cent from 7.2 per cent in South Australia.
The rate was down to five per cent from 5.2 per cent in Western Australia and dropped to 7.1 per cent from 7.6 per cent in Tasmania.
However, unemployment bucked the trend in the territories.
In the Northern Territory the jobless rate rose to 4.6 per cent from 4.3 per cent and was up at 4.8 per cent in the ACT from 4.6 per cent.
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