Around 20,000 of the new jobs were created in Victoria and another 30,000 in NSW which is replacing Victoria as the engine room of job creation as its labour market picks up. Victoria's unemployment rate remains the nation's lowest after Western Australia at 5.3 percent. The NSW rate climbed from 5.5 to 5.8 percent as more people decided it was the right time to seek work. "It's what you expect to see in the early phases of an upswing," said ICAP Securities economist Adam Carr.

"During a slowdown people tend to leave the job market or postpone entering it due to the difficulty of finding the job they want. In effect they fall out of the labour market, especially in two-income families. "As the economy picks up these people feel more optimistic and start looking again. It causes a blip in the unemployment rate but it's nothing to be worried about," Carr added. Australia's unemployment rate stayed broadly steady at around 5.4 percent as an extra 40,200 people looked for work.

The figures show that for the first time more than 11 million Australians were in work, six million men and five million women. Deputy Prime Minister Julia Gillard paid tribute to the "employers and unions who helped steer Australia through the global financial crisis by keeping workers engaged in the labour market". She said the budget forecast of an unemployment rate of 4.75 percent by June next year was in reach.