Unemployment rose to its highest level in more than a year, the number of hours people worked collapsed and those wanting more work was nearing a 20-year high in February.
The unemployment rate jumped to 5.9 per cent last month, from 5.7 per cent January, the Australian Bureau of Statistics reported on Thursday.
About 6,400 jobs were lost in the month, widely missing market forecasts of 15,000 jobs being added.
The Australian Institute of Company Directors chief economist Stephen Walters called the February job figures "a disaster".
"The good news is that things could be worse, the bad news is that it probably will be some time before there is sustained improvement," he said in a note.
"As with the patchy business investment outlook, it seems many firms still are reluctant to hire sufficient permanent employees to absorb new entrants to the labour market."
Westpac senior economist Justin Smirk said some may be tempted to note that, while the number of part-time jobs fell by 33,500, the number of full-time jobs rose by 27,100.
"However, we would rather not make too much of the extreme switching between full-time/part-time you can get from month to month," he said.
"Instead, we highlight the 1.2 per cent monthly decline in hours worked (to 0.5 per cent per year) to argue this is a soft update."
The total number of hours worked fell in 20.5 million hours to 1.66 billion hours in February, with the collapse mainly due to the full-time hours falling by 19 million.
Meanwhile, the underutilisaton rate, or the proportion of both unemployed and employed people looking for more work, rose to 14.6 per cent in February from 14.2 per cent in January.
UBS economists noted that underutilisation was approaching the highest level in nearly two decades.
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