The ACT unemployment rate rose from 3.8 to 3.9 per cent in July as business figures warned that the full impact of Commonwealth job cuts were still to be felt in the territory.
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Jobs were lost in almost every state and territory across Australia last month, as the national rate reached its highest point since August 2002.
New figures released by the Australian Bureau of Statistics on Thursday showed the ACT recorded the highest unemployment rate since 4 per cent was registered in December last year.
But while unemployment increased in the ACT, the participation rate for the territory remained steady at 71.2 per cent.
The national seasonally adjusted unemployment rate was up 0.3 percentage points to 6.4 per cent in July, the highest point since August 2002.
Canberra Business Council chief executive Chris Faulks said it was likely the full impact of the federal government's public service job cuts had yet to hit the ACT.
But she said the ACT economy was sound and prospects were good for business in Canberra, pointing out how the city's international business was flourishing.
"One of our members today received a single order for $2.2 million for the sale of wine to China," she said.
"The exporters are really doing very well and companies that are involved in the e-commerce digital market and focusing on markets outside of Canberra, rather than focusing on what's happening here, are doing remarkably well."
ACT Treasurer Andrew Barr said he was disappointed to see the unemployment rate had risen but it had been expected given the Abbott government's ongoing public service cuts and associated drop in confidence.
"The ACT economy continues to produce jobs in spite of the Commonwealth cutbacks. The trend number of ACT residents in employment increased by 200 to 215,000," he said.
"Given today's figures, it's clear that the ACT government is taking the right approach to supporting our economy and supporting jobs."
He said it was important to note that the ACT had the lowest trend unemployment rate in the country, well below the national average, and the second highest trend participation rate in the past month.
ACT shadow treasurer Brendan Smyth said the small rise in employment was a further indicator that Canberra could not rely on the federal government for its economic growth.
“Further diversification of the economic base is needed to insulate Canberra from the boom and bust cycle that the city suffers from due to federal spending cuts," Mr Smyth said.
“Recent data on the softness of the retail market and the Property Council’s report released this morning showing commercial property vacancies climbing towards 14 per cent clearly indicates the need for more to be done to improve the economy of the ACT.”
Nationally, Queensland recorded the biggest loss of jobs in July, with unemployment jumping from 6.2 to 6.8 per cent. In NSW unemployment rose from 5.7 to 5.9 per cent.
Victoria's unemployment lifted 0.4 percentage points to 7 per cent, Tasmania jumped from 7.3 to 7.6 per cent and Western Australia's jobless rate inched higher to 5.2 per cent.
