The number of people unemployed has topped 800,000 for the first time in just over two decades as new figures show an unexpected spike in the jobless rate.
Opposition Leader Bill Shorten was "greatly concerned" by the rise in the unemployment rate to 6.3 per cent in July, returning to a near-13-year high seen at the start of the year.
It was unfortunate timing for Prime Minister Tony Abbott, who had trumpeted the government's commitment to "jobs and growth" no less than seven times just prior to the latest labour force figures were released on Thursday.
"That is at the heart of this government's mission," Mr Abbott told reporters in Geelong.
But Employment Minister Eric Abetz played down the jobless rate rise, instead pointing to a 38,500 increase in the number of people employed.
"The strengthening employment growth figures are encouraging," Senator Abetz said.
The employment increase was three times the size expected by economists and included a 12,400 rise in full-time workers.
As ANZ Research economist Justin Fabo put it, there is "something for everyone in this report".
Senator Abetz pointed to the fact that workforce participation rose by 0.3 percentage points to 65.1 per cent as to why the jobless rate increased.
"More Australians are now willing to re-engage with the jobs market because they believe there are employment opportunities," he told reporters in Hobart.
Treasurer Joe Hockey said if the participation rate had stayed the same, unemployment would have been 5.9 per cent.
But Mr Shorten said an extra 100,000 people were now out of work since the 2013 election.
"Perhaps most concerning is we see Western Australia is receiving a big brunt of the unemployment bad news," he told reporters in Melbourne.
Unemployment there rose from 5.8 per cent to 6.4 per cent and above the national average.
The national rate rose from an upwardly revised 6.1 per cent in June, while the 5.9 per cent rate previously reported for May has been corrected to six per cent.
However, the July rate is still shy of the 6.5 per cent peak that has been previously predicted by both Treasury and the Reserve Bank.
The central bank will release its quarterly statement on monetary policy on Friday, where some economists had expected it to downgrade its jobless forecast.
"The RBA will still conclude that employment has strengthened, but won't need to revise down its unemployment forecasts as much as seemed likely before this data," National Australia Bank markets chief economist Ivan Colhoun said.
It still means the RBA will keep the cash rate at a record low of two per cent for sometime yet.