The labour market has lost more than 67,000 full-time jobs over the past year as the unemployment rate remained at a four-year high of 5.8 per cent in December.

Thursday's softer than expected jobs report sent the dollar tumbling more than a cent to just under US88¢, a 3½⁄-year low. The currency was buying US88.13¢ in late trade.

Economists said the job figures would add to pressure for another cut to the cash rate, but further easing by the Reserve Bank was unlikely as it had already factored a rising jobless rate into its forecasts.

''Through the course of 2013, we've had an increase in jobs of only 0.5 per cent,'' said NAB senior economist Spiros Papadopoulos.

''So it's very modest growth and really the unemployment rate would be trending higher had it not been for the fall in the participation rate.''

In unrounded terms, the jobless rate for December ticked up from 5.77 per cent to 5.85 per cent. The economy lost 31,600 full-time positions and gained 9000 part-time jobs in December, the Bureau of Statistics figures showed.

The participation rate, the percentage of people either in work or looking for work, dropped to a seven-year low of 64.6 per cent.

The employment-to-population ratio, the proportion of the total population that is employed, slipped 0.2 percentage points to 60.8 per cent - the lowest since February 2005.

The labour market pain was most visible in the full-time data. The full-time unemployment rate ticked up to 6.2 per cent from 6 per cent, its highest level in 3½⁄ years. The economy lost 67,500 full-time positions in 2013, a fall of almost 1 percentage point and a decline not seen since the financial crisis.

''The last time this occurred was in 2009,'' Citi economists Josh Williamson and Paul Brennan said.

''Back then, fears about the economy from the [financial crisis] were to blame. This time around, Australia's sub-trend growth performance hasn't allowed employment creation to keep pace with the supply of labour, which added 117,000 new people to the workforce.''

The job losses in December were shared across Australia's states and territories.

While NSW's jobless rate edged lower by 0.1 percentage point to 5.8 per cent, the state shed more than 10,000 positions in December. A total of 39,900 jobs were lost in NSW over the second half of 2013, reflecting a stalling of employment growth in the state, Deutsche Bank economists Adam Boyton and Phil O'Donaghoe said.

South Australia's unemployment rate edged lower to 6.7 per cent, while Victoria's and Tasmania's rate remained stable at 6.2 and 7.7 per cent respectively.

The jobless rate rose by 0.2 percentage points in Queensland to 5.9 per cent and by 0.4 percentage points in Western Australia to 4.7 per cent. In trend terms, the Northern Territory's unemployment rate eased to 4.2 per cent. It fell to 4 per cent in the ACT.

The relative stability in the headline jobless rate was helped by the weakening participation rate. Just one year ago, the participation rate stood at 65.2 per cent.

Economists said the unemployment rate would have pushed higher to 6.1 per cent in December if the participation rate had remained at November's level of 64.8 per cent.

The soft labour force report came on the back of a recent spate of encouraging local economic data. Retail sales picked up towards the end of 2013, while house prices and building approvals have also increased amid the low interest-rate environment.

Economists said such figures would temper any moves by the RBA to ease monetary policy further. The central bank has shown a preference for a weaker exchange rate, rather than a further easing in interest rates, to support the economy this year.

''The Australian dollar looks content to sit below US90¢ and that will provide a boost to domestic businesses,'' Commonwealth Bank economist Gareth Aird said.