Unemployment holds steady despite surprise drop in jobs

That was despite consensus predictions for a rise in employment of 30,000.

However, the unemployment rate was unchanged as the number of unemployed people fell by 11,000, with the participation rate falling 0.4 per cent to 66.8 per cent.

But participation remained historically high, just 0.4 per cent off its record, said ABS head of labour statistics Bjorn Jarvis.

"Despite the fall this month, the participation rate is still relatively high, having reached a historical high last month, and is 0.1 percentage points higher than this time last year,' Mr Jarvis said.

The strength of the labour market has been a consistent bright spot in Australia's economy, with unemployment remaining below the historical average of 6.3 per cent since 1972, despite high interest rates.

Labor-aligned think tank the McKell Institute found the unemployment rate has been lower under the government of Anthony Albanese than any prime minister since Gough Whitlam, averaging 3.8 per cent since he was elected.

"A low unemployment rate is not just some abstract number, it is fundamental to the success of individuals and societies," said the institute's chief executive Ed Cavanough.

Mr Cavanough said workplace protections such as 'same job, same pay' laws and multi-employer bargaining had not caused unemployment to skyrocket and had led to a return to growth in real wages.

The underemployment rate decreased 0.1 percentage points to 5.9 per cent in February.

Assistant employment minister Andrew Leigh said more Australians were finding secure work and landing roles faster than ever.

"Participation is rising, underemployment is falling, and workers have greater power to move on their own terms," he said.

"These numbers reflect a labour market that is stronger, fairer, and more dynamic than we've seen in a generation."

But Labor cannot take all the credit.

Unemployment was already trending down under the coalition, with Mr Albanese inheriting a jobless rate of 3.9 per cent in May 2022, down from the COVID-impacted peak of 7.5 per cent in July 2020.

Labor has also been accused of artificially tightening the labour market by overseeing a massive expansion in non-market sector jobs, such as healthcare and education, which has made it harder for other industries to find workers.

"The economy right now is being led by public spending and immigration when we need an economy that is led by the private sector and is delivering for Australians," shadow treasurer Angus Taylor said in December.

Reserve Bank governor Michele Bullock has cited labour market tightness as a reason for not needing to lower interest rates earlier, as central banks in peer economies had done.

Economists at JP Morgan think the bigger question for the RBA is how much of an impact the low unemployment rate is having on prices and wages.

In its latest meeting minutes, the Reserve Bank's board noted "the strongest reason" supporting its cash rate cut was the signal from moderating inflation and wages growth.

The central bank will have to wait until the April 30 quarterly CPI print to find out whether inflation has continued to moderate, despite the low unemployment rate, meaning an April 1 rate cut is probably off the cards.