Latest labour statistics from the Australian Bureau of Statistics shows the jobless rate in the Australian Capital Territory jumped 2.5 percentage points to a seasonally adjusted 6.6 per cent in October.

The increase has flipped the traditional lower rates of unemployment experienced in the ACT, with the jurisdiction now holding the highest levels of people searching for work in the country. The ACT had the equal lowest rate in the September, at 4.1 per cent.

Nationally, unemployment in October rose to 5.2 per cent in October, while the participation rate increased 0.1 percentage point to 64.7 per cent.

ANZ economist Catherine Birch told The Canberra Times the ACT's figure is primarily being influenced by a drop in employment and a rebound in the participation rate, which shows more people in the region are actively looking for work.

Ms Birch noted she is not concerned by the big jump in the ACT, claiming the territory's labour statistics are more variable due a smaller data size.

"I wouldn't be reading too much into just one month of data," Ms Birch said.

"The unemployment rate I think is going to be pretty bumpy over the next few months."

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The ACT's participation rate is at 68.4 per cent, while other lockdown states Victoria and NSW sit at 64.6 per cent and 62.6 per cent, respectively.

Ms Birch said the higher proportion of public sector workers traditionally makes the labour market in the ACT counter cyclical.

"That's probably something to look for potentially next year, once we see some of that fiscal stimulus start to be withdrawn and what that does to the ACT labour market," she said.

Ms Birch also added job advertisements in the ACT were up more than 12.5 per cent.

KPMG chief economist Brendan Rynne said the national effective unemployment stands at 6.6 per cent, once stood down and employees working zero hours are accounted for.

"This is an increase of 0.6 per cent since the September figures," Dr Rynne said. "Notably the largest gaps between the official and effective unemployment rates are in Victoria and NSW."

Despite the rise, Treasurer Josh Frydenberg said the economic outlook remained optimistic, claiming the Reserve Bank expects unemployment to dip below 5 per cent by the end of the year.

Mr Frydenberg also said the drop in unemployment is underpinned by an upgrade in economic growth forecasts, which is anticipating the economy to grow 5.5 per cent in the coming year.

"There are jobs," he said. "Job ads are up by 30 per cent on where they were since the start of the pandemic. Those jobs are available and people are taking them now that those restrictions have ended."

Labor leader Anthony Albanese said there are two million Australians either unemployed or underemployed within the labour market, warning gig jobs not based on hourly awards were deteriorating working conditions.

"The real crisis that's out there is insecure work," Mr Albanese said.

"We need to make sure that our industrial relations system keeps up with that."

The Australian Bureau of Statistics reported a shock drop in the number of employed people over the period, which saw 46,000 people lose work over October.

Market expectations were pointing to a rise in employed people of around 50,000.

ABS head of labour statistics Bjorn Jarvis said the rises in unemployment were showing more workers were seeking to re-enter the job market following the implementation of lockdowns.

"The increases in unemployment show that people were preparing to get back to work, and increasingly available and actively looking for work - particularly in New South Wales, Victoria and the Australian Capital Territory," Mr Jarvis said.

"It may seem counterintuitive for unemployment to rise as conditions are about to improve. However, this shows how unusual lockdowns are, compared with other economic shocks, in how they limit being able to work and look for work."

The underemployment rate rose to 9.5 per cent.