The unemployment rate rose to a four-year high in August, posing a challenge for both the central bank and the incoming Abbott government.
New data on Thursday showed the jobless rate rising to 5.8 per cent, as economists had expected, compared to 5.7 per cent in both June and July.
The Australian Bureau of Statistics said the number of people in employment dropped by 10,800 in August, when economists had expected a 10,000 increase.
Full-time employment fell by 2600, while those in part-time work decreased by 8200.
Forward indicators of employment, such as job advertisements, point to a continued reluctance to hire by business in the coming months.
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Treasury has forecast the unemployment rate rising to 6.25 per cent by June next year.
Among the states, the jobless rate rose to 5.9 per cent from 5.7 per cent in NSW, while in Queensland it increased to six per cent from 5.9 per cent.
In Western Australia the rate jumped to five per cent from 4.6 per cent and in Tasmania it rose to 8.3 per cent from 8.2 per cent.
South Australia bucked the trend with its unemployment rate easing to 6.8 per cent from 7.1 per cent, while in Victoria it was unchanged at 5.7 per cent.
In The ACT the rate was also unchanged at 3.7 per cent, while in the Northern Territory it rose to 5.5 per cent from 5.4 per cent.
