The latest jobs figures should give Australians something to smile about and help reverse the recent slump in confidence amid economic concerns.
The number of people in employment increased by 42,000 in May, pushing the jobless rate down to six per cent - its lowest level in a year and down from a revised 6.1 per cent in April.
The figure is better than economists expected.
The jobless rate is now tracking lower than the 6.25 per cent forecast for this financial year in the budget.
Commonwealth Securities economist Savanth Sebastian says the result should help ease some concerns about job security.
"An improvement in confidence would certainly bode well for retail activity and broader economic growth," he said.
However, opposition employment spokesman Brendan O'Connor says the jobless rate remains excessively high and is above the level seen during the 2008-09 global financial crisis.
"We have almost 750,000 Australians still on the unemployment queues and for that reason the government needs to do more," he told reporters in Melbourne.
Acting employment minister Christopher Pyne agrees there is still work to be done to get more people into employment.
"There are jobs packages, growth packages in the budget to make sure that we are focused in a very laser beam-like way on creating jobs," he told reporters in Adelaide.
The jobless rate in South Australia has risen to 7.6 per cent, the highest in the nation.
South Australian independent senator Nick Xenophon has again called for a commitment from the government to build future submarines in his state.
"These figures are just the tip of the iceberg, given the level of under-employment is dramatically higher ... and the figures for youth unemployment are even worse," he said.
The jobs data come after a turbulent week for the government on the issue on housing affordability.
Treasurer Joe Hockey drew flak for telling first home buyers to "get a good job that pays good money".
Thursday's employment figures did not specify whether the 42,000 jobs created were in "good" positions or otherwise - only that 14,700 were full-time roles and 27,300 part-time.
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