July employment figures showed the jobless rate is at a four-year high, as the country lost 10,200 jobs.
The figures indicated the economy is yet to transition from mining to non-mining sectors, and it showed jobs are moving to non-mining sectors.
Western Australia and Queensland continued to have strong employment growth but this is expected to dip as the mining investment boom hits its peak, according to Commonwealth Bank senior economist Michael Workman.
He added NSW and Victoria, which are more dependent on the interest rates, are gaining from lower interest rates, falling Australian dollar and a recovering US economy.
Data also showed people are working longer hours, as average hours increased to highs of 1648.6 million hours, the SMH reported.
Unemployment remained at 5.7 per cent in July.
The dollar dipped to US89.73c before climbing to US90.84c in the wake of better-than-anticipated Chinese trade data.
Interest rates were recently cut to record lows of 2.5 per cent. Interest rates could be further cut on the back of the lower jobless rates.
“In trend terms total employment growth is basically zero. It’s only 1000 a month so it’s pretty flat [and] full-time employment is falling in trend terms,” ANZ senior economist Justin Fabo said.
Economists expected the latest jobless rate trend as population exceeds jobs growth. Employment-to-population ratio stands at a seasonally adjusted 61.4 per cent for July.
ANZ recently released its job advertisements report, which said it had dipped in July for the sixth consecutive month.
“Without a clear view about what the tax and regulatory environment will look like after the election, firms may have been more willing to boost hours rather than hire new staff,” HSBC chief economist for Australia, Paul Bloxham said.
The Reserve Bank is expected to release its statement of monetary policy today, with predictions of a softer growth outlook.