The longest run of jobs growth in 23 years has taken the unemployment rate to to 5.4 per cent, its lowest level since 2013.
But the big question among economists is when the recent strength in the jobs market will begin to boost pay packets.
The total number of people with a job rose by 3,700 in October, the 13th consecutive monthly gain, which is the longest stretch of growth since 1994.
October's gains were driven by full-time employment, which rose by 24,300, offsetting a fall of 20,700 in part-time positions.
Full-time jobs have increased by 297,900 in the past year, while part-time positions have grown by 57,800, resulting in a rise in the hours worked by those in the work force.
October's jobs growth was much weaker than economists had expected, but a slight drop in the participation rate - the number of people employed or actively looking for a job - contributed to the unemployment rate's fall.
National Australia Bank economist Tapas Strickland said the participation rate may have fallen due to the closure of Toyota's manufacturing plant in Victoria, as workers there either retired or took time off before looking for a new job.
He also said the jobs market is likely to continue to improve and the Reserve Bank could begin lifting the cash rate in the second half of 2018, but only if it begins to see evidence of wages growth and faster inflation.
Wages rose by a weaker than expected 0.5 per cent in the September quarter, for an annual growth rate of just two per cent.
St George senior economist Janu Chan said a fall in underemployment, which remains at elevated levels, will spark wages growth.
"If the labour market continues to improve at this rate, spare capacity will eventually be absorbed," she said.
"However, the current unemployment rate is still suggesting that spare capacity remains, and would need to fall further before there is a strong prospect of wage and inflation picking up."
The Australian dollar got a brief boost from the jobs figures, immediately jumping 0.2 US cents to 76.10 US cents, before returning to 75.94 US cents by 1620 AEDT.
