Australia's unemployment rate for November rose to 5.3 per cent, while the ACT's rate remained steady at 3.9 per cent.
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Economists had tipped the jobless rate to remain at 5.2 per cent last month, matching the previous month's 5.2 per cent published figure.
The almost 40,000 drop in full-time jobs, while partially offset by a 33,600 increase in part-time positions, adds to the case for the Reserve Bank to keep cutting interest rates. However, the big four banks are still yet to reveal how they will respond to this week's 25-basis point cut by the Reserve.
The jobs figures issed by the Australian Bureeau of Statistics today mark the last major economic official data to be issued this year.
ANZ job ads were flat in November from a revised 0.6 per cent fall in October. The forward-looking reading on the jobs market suggests weaker growth to come, analysts say.
Macquarie economist Brian Redican said the result was "much weaker than the market had been looking for".
"The longer this kind of softness persists the greater downside risk for consumer spending and that's just going to put pressure on businesses," he said.
The Australian dollar dived half a US cent on the news to $US1.023 as investors bet it increased the chances the Reserve Bank will extend its series of interest rate cuts to bolster growth.
Earlier this week, the RBA sliced interest rates another 25 basis points, its first back-to-back monthly rate cut since April 2009.
RBC Capital Markets economist Su-lin Ong said jobs were not dropping at "an alarming pace".
''But that tells you a lot about the underlying economy and that will keep the RBA's easing bias firmly intact,'' she said.
RBC expected another 50 basis point cut in the RBA's cash rate to 3.75 per cent next year, while some other economists are predicting even steeper cuts.
The unemployment rate in the ACT is steady at 3.9 per cent in trend terms, however, the bureau revised up the October result from the 3.8 per cent reported last month. The bureau does not report seasonally adjusted figures for the territory for jobs.
There was a 100-person increase - to 204,200 - in the number of people with jobs in the territory, and a 100-person decrease in the number of people unemployed - to 8200 - while the participation rate fell by 0.1 of a point to 72 per cent.
The ACT still has the lowest unemployment rate in the country, ahead of the Northern Territory at 4.2 per cent in trend terms and West Australia at a seasonally adjusted 4.3 per cent.
The labour force participation rate - or the proportion of people either working or actively looking for work - fell by 0.1 of a point to 65.5 per cent.
And the bureau updated its underemployment figures. The underemployment rate increased from 7 per cent to 7.3 per cent.
Women were almost twice as likely as men to be underemployed. The bureau reported that 9.5 per cent of working women (up from 9.1 per cent in the previous quarter) wanted to work more hours - or 520,500 women.
In comparison, there were 355,600 working men (or 5.4 per cent, up from 5.2 per cent three months earlier) who wanted to work more hours.
The labour force underutilisation rate, which combines the number of people unemployed and those who want to work more and hours and are therefore under-employed. The underutilisation rate rose 0.2 of a point to 12.6 per cent from August.
"The male labour force underutilisation rate increased 0.1 of a point to 10.6 per cent. The female labour force underutilisation rate increased 0.4 of a point to 14.9 per cent," the bureau said.
The ACT had an under utilisation rate of 8.7 per cent. This was also the lowest in the nation.
Australia's economy is increasingly divided between the booming resource sector and stagnant non-mining industries. Figures out this week pointed to Australia's growth picking up - and remaining the envy of much of the rest of the rich world - but most of the expansion is coming in Western Australia and Queensland alone.
Mr Redican said that people were getting excited about growth numbers yesterday, which showed third-quarter GDP expanded by a better-than-expected 1 per cent.
"This employment data indicates the strong economy is not translating into more jobs," he said,
The increase in the national unemployment rate appeared to be mainly for women, whose unemployment rate increased from 5.1 per cent to 5.3 per cent - effectively reversing the drop that was recorded in October. The unemployment rate for men was steady at 5.2 per cent.
There were 6300 fewer Australians employed in November than October.
"The decrease in employment was driven by a decrease in full-time employment, down 39,900 people to 8,026,300, and was offset by an increase in part-time employment, up 33,600 people to 3,430,800," the bureau said.
"The number of people unemployed increased by 9400 people to 635,800 in November."
The youth unemployment rate increased by 0.4 of a point to a seasonally adjusted 16 per cent.
The bureau also reported a drop in the number of aggregate hours worked in November, when they were down 11.3 million hours to 1.617 billion hours.
with Chris Zappone