The Reserve Bank is upbeat about the prospect for jobs in Australia.
The latest jobs data released on Thursday showed 5.4 per cent unemployment in July.
RBA Governor Philip Lowe told a parliamentary hearing on Friday three per cent growth in the economy should see the unemployment rate come down.
Dr Lowe said of particular note was the large rise in participation by older workers, who were staying in the labour market for longer.
And there had been a "marked decline" in youth unemployment over the past six months.
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"The labour market is good," he said.
Key factors were strong growth in the global economy, commodity prices being higher than a year ago and strong lift in infrastructure investment especially in the eastern states.
Low interest rates and greater investment outside the resources sector were also helping.
"Collectively those factors are generating a strong demand for labour and we are now seeing that in the unemployment rate which is very good news," Dr Lowe said.
Employment was up almost 2.5 per cent over the past year with the labour force growing at 1.75 per cent.
