Economists expect wages growth will eventually accelerate as a result of continued strength in employment.
But they also warn it has raised the risk of higher interest rates before long.
Employment jumped by a further 54,200 in August, more than double what economists expected and included a 40,100 increase in full-time workers and a 14,100 rise in part-time work.
The jobless rate remained at 5.6 per cent for the third month in a row as more people sort work
An upbeat Treasurer Scott Morrison noted there had now been 11 consecutive months of jobs being created.
"That is the longest run in 23 years," he told parliament on Thursday.
Since the coalition came to power in 2013, 800,000 jobs had been created with more than 500,000 of those in the past two years.
Deloitte Access Economics economist Chris Richardson described it as "good news story".
"Our wage growth will eventually pick up as well," he told AAP.
Australian Chamber of Commerce and Industry boss James Pearson agreed.
"We have seen profitability start to rise, we have seen underemployment get soaked up because firms are in a position to offer their workers more hours," he told reporters in Canberra.
But for this to continue it will depend on profitability being sustained, productivity lifting and wage increases being affordable.
Opposition employment spokesman Brendan O'Connor said the labour market still faced serious challenges with more than 1.1 million people considered as underemployed - people in work but seeking additional hours.
"This is contributing to record low wages growth and the government has no plan to address this challenge," he said in a statement.
The quarterly underemployment was 8.6 per cent, down from 8.8 per cent in May and a record high of 8.9 per cent in February.
HSBC chief economist Paul Bloxham said with jobs growing and economic growth picking up, wages growth and inflation would also edge higher leaving the Reserve Bank little reason to keep its highly accommodative stance of monetary policy.
"We expect the RBA to start lifting its cash rate in early 2018," he said.
The latest Westpac-ACCI industrial trends survey also showed Australia's manufacturing sector is benefiting from an upswing in government infrastructure spending, stronger world growth and a relatively low Australian dollar supporting exports.
The survey's composite index rose 1.1 points to 66.1 in the September quarter, extending a rebound from a dip to 55.1 in June 2016 that coincided with the federal election.
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