The jobless rate unexpectedly dropped to 5.5 per cent in May as another 42,000 people joined the workforce.
Malcolm Turnbull insists the jobless rate falling to a four-year low shows the coalition's "jobs and growth" election mantra was not just a slogan.
"I tell you what ... it's an outcome," a clearly buoyant prime minister told parliament on Thursday.
New figures on Thursday showed 42,000 people joined the workforce in May, four times as many expected by economists.
The 52,100 new full-time jobs were partly offset by a 10,100 drop in part-time workers.
As a result, the unemployment rate dropped from 5.7 per cent in April to 5.5 per cent - its lowest level since February 2013.
The unemployment rate has fallen from 5.9 per cent in two months.
Employment Minister Michaelia Cash also noted a slight pick-up in the participation rate.
"What that says is Australians are putting their hands up and saying 'I am looking for work, I'm ready willing and able," she told reporters.
Labor employment spokesman Brendan O'Connor welcomed the fall in unemployment but noted there were still more people out of work than when the coalition came to power in 2013.
There are also still many people considered as underemployed.
"(A total of) 1.1 million Australians are desperately looking for more work and cannot find it," Mr O'Connor told reporters
"That's why people are struggling to make ends meet."
The underemployment rate at 8.8 per cent was only a shade below the record 8.9 per cent set in February.
The Australian Bureau of Statistics has recorded 140,000 people having found a job in the past three months.
"While there has been some doubts about the accuracy of the ABS employment data in recent months we think that the fact that we have had three very solid outcomes is a good sign that conditions have firmed," Commonwealth Bank economist Kristina Clifton said.
A separate report found manufacturers are capping off an improved performance this financial year but rising energy costs are taking their toll.
The Australian Chamber of Commerce and Industry-Westpac survey of industrial trends for the June quarter showed its composite index rising a further 1.8 points to an above par 65, extending the rebound from a dip to 55.1 a year ago and just prior to the federal election.
Westpac senior economist Andrew Hanlan said state infrastructure spending, stronger world growth, spill-overs from mining and agriculture and a low Australian dollar have all helped to buoy the sector.
Even so, there were some negatives, including rising energy costs.
ACCI boss James Pearson said the Finkel review offers a blueprint for Australia's energy future.
"Now we need politicians of all sides to set aside ideological baggage and reach an agreement that provides certainty for the future," he said.