Youth unemployment in the territory increased by 0.3 percentage points over February up to 10.3 per cent.

Canberra still has the lowest unemployment rate in the nation but it is still higher than the pre-pandemic rate of 2.8 per cent in February last year.

The drop in the ACT's unemployment rate came after the territory's rate rose by 0.7 percentage points in January.

As well, the ACT's underemployment rate dropped by 0.7 per cent to 5 per cent from January to March. The participation rate also increased by 0.6 percentage points to 71.7 per cent.

The national unemployment rate unexpectedly dropped to 5.8 per cent, as a further 88,700 people joined the workforce.

Economists had expected a more modest 30,000 increase in employment in February, with the jobless rate easing to 6.3 per cent from an originally reported 6.4 per cent in January.

However the January rate was revised down to 6.3 per cent.

"The strong employment growth this month saw employment rise above 13 million people and was 4000 people higher than March 2020," Australian Bureau of Statistics head of labour statistics Bjorn Jarvis said.