The jobless rate rose to seven per cent in October, despite the number of people in employment jumping by an unexpected 178,800 in the month.
Economists had expected the unemployment rate to spike to 7.1 per cent compared to 6.9 per cent in September, while predicting a 30,000 fall in employment.
Full-time employment increased by 97,000, while part-time employment rose by 81,800, Australian Bureau of Statistics data released on Thursday shows.
“This strong increase means that employment in October was only 1.7 per cent below March,” ABS head of labour statistics Bjorn Jarvis said, referring to the start of the coronavirus pandemic.
The rise in the unemployment rate came as the participation rate, which measures those in work and people actively seeking a job, rose to 65.8 per cent from 64.9 per cent previously.