Treasurer Scott Morrison boasts the government's plan to create jobs is getting results.
New figures show 27,900 people joined the workforce in July, building on the recent run of strong outcomes and easing the jobless rate to 5.6 per cent from an upwardly revised 5.7 per cent in June.
However, Thursday's data also showed full-time employment fell by 20,300 in July, partly offsetting a 48,200 surge in part-time employment.
Mr Morrison said 240,000 jobs were created in the financial year, the highest rate since the global financial crisis.
Despite the fall in July, the treasurer said the rise in full-time jobs in the past six months was the strongest in 40 years.
"We have a plan that we are implementing to create jobs in this country," he told parliament.
"We are getting results."
But Labor finance spokesman Jim Chalmers said the headline jobless figure had been "roughly stable" since the coalition came to office.
He was concerned there were 14 million fewer hours worked in the economy over the month.
"The story there is about under-employment - we've got 1.1 million Australians who want to work more and can't find more hours," Dr Chalmers told Sky News.
Economists say this is a factor in the slow wages growth dogging the economy and undermining confidence.
Figures on Wednesday showed overall annual wage growth remained at a 20-year low of 1.9 per cent and private sector outcomes were even more benign at 1.8 per cent over the year to June, just below the consumer price index at 1.9 per cent.
The May budget forecast wages to rise two per cent in 2016/17, 2.5 per cent in 2017/18 and 3.75 per cent by 2020/21.
Asked if he was still confident of that outlook, Mr Morrison said: "We'll update those if they need to be updated."
"I don't share the view that the Australian economy and wages won't lift in the future, particularly if we continue to make the good choices we are making around the economy," he earlier told ABC radio.
But Labor said it was "dumbfounding" at a time of low wages growth, the government was prioritising an income tax hike for low and middle-income workers through a rise in the Medicare levy.
"Stagnant wages, falling living standards and record levels of underemployment all mean that low and middle income Australians are less able to pay more tax than they have in the past," shadow treasurer Chris Bowen and families and social services spokesman woman Jenny Macklin said in a statement.
