The unemployment rate has risen from 5.3 to 5.4 per cent, as 5,500 jobs were lost in December.
Bureau of Statistics figures show the fall was centred on full-time positions, with an estimated 13,800 lost, while part-time employment increased by 8,300.
The original jobless rate of 5.2 per cent for November was revised up to 5.3 per cent, meaning last month's rise to 5.4 per cent was a modest 0.1 percentage point increase.
The more stable trend unemployment number, which smoothes out monthly volatility, remained steady at 5.4 per cent.
The proportion of those aged over 15 in work or looking for it - the participation rate - remained steady at 65.1 per cent.
Due to the rise in joblessness and shift away from full-time to part-time work, aggregate monthly hours worked fell by 1.1 million to 1.624 billion hours in December.
However, CommSec economist Savanth Sebastian says there were some positive revisions to the November data, particularly for hours worked.
"While 5,500 jobs were lost in December, the November result was revised up to show 17,100 job gains rather than a 13,900 lift in jobs," he wrote in a note on the figures.
"Indeed hours worked was also substantially revised up in November, now showing 0.8 per cent growth rather than 0.1 per cent." 'Holding pattern' Mr Sebastian says that demonstrates the resilience of the Australian labour market in the face of patchy growth and weakness in particular industries.
"It's clear that the job market isn't shooting the lights out but by no means is unemployment soaring.
In a big picture sense the job market is in a holding pattern with a modest degree of softening," he noted.
"But while jobs are being lost in some industries, clearly they are being created in other industries." Nearly 150,000 jobs were created last year, but that failed to keep pace with a 185,000 person increase aged over 15.
Only a decline in the proportion of people either in work or looking for it helped keep unemployment relatively steady at 5.4 per cent, up just 0.2 percentage points from a year ago.
Finance reporter David Taylor told PM the unemployment rate "gets interesting" in state-to-state comparisons.
Taylor told PM the figures give an indication of how the economy is performing overall.
TD Securities strategist Alvin Pontoh says he expects that employment will remain soft, but unemployment will not worsen dramatically.
"Those calling for multiple rate cuts probably expect the unemployment rate to continue to rise towards circa 6 per cent, while in contrast we look for a steady rate at 5.5 per cent through 2013, justifying just one more rate cut by mid-year," he wrote in a note on the data.
"Leading indicators are terrible but we believe that the (lagged) effect of earlier easing of monetary policy should translate to a continuation of the current moderate pace of employment growth rather than a renewed deterioration, just enough to absorb the expected labour force growth." The Australian dollar eased modestly on the data, dropping just over 0.1 cents to 105.45 US cents by 11:41am (AEDT).