Economists doubt a confused set of labour force figures will stand in the way of the Reserve Bank of Australia (RBA) cutting the cash rate again at its Melbourne Cup day board meeting in November.

The Australian Bureau of Statistics (ABS) report released on Thursday showed that while more Australians than ever before are benefiting from full-time work, the jobless rate had also soared to its highest level in over two years.

The unemployment rate hit 5.4 per cent in September for the first time since April 2010, rising smartly from 5.1 per cent in August, when economists had expected a more modest increase to 5.2 per cent.

Prime Minister Julia Gillard said this was the result of an increase in the participation rate of those people in or actively looking for work to 65.2 per cent from 65.0 per cent.

"More people want to get jobs," Ms Gillard told parliament.

A 14,500 rise in the number of people employed in September was almost three times larger than expected by economists, and was boosted by a 32,100 surge in full-time workers, although the number of part-time workers fell by 17,700.

Employment Minister Bill Shorten said there were now a record 8.1 million full-time workers.

"Since the carbon pricing mechanism was introduced ... there have been 200 jobs created every day," he told parliament, arguing that cast the lie that somehow government policies were causing unemployment.

But shadow treasurer Joe Hockey said the "substantial" unemployment rise reflected soft business confidence.

"Inevitably employment confidence comes down to business confidence," Mr Hockey told reporters in Canberra.

"There are no jobs if business isn't confident, there are no jobs if business isn't profitable."

TD Securities strategist Alvin Pontoh said the labour force report validated the RBA's decision to cut the cash rate last week to 3.25 per cent and confirmed its observation that the labour market has softened in recent months.

"There's nothing in this report to stop the RBA from easing rates further next month, bringing the cash rate to 3.0 per cent," Mr Pontoh said.

Unemployment rose in Queensland to 6.3 per cent from 6.0 per cent, drawing a stinging attack from the federal government.

Ms Gillard said what was happening in Queensland could be explained in two words - "Campbell Newman".

She said the premier's approach to sacking state public servants was showing up in the jobless numbers, adding Opposition Leader Tony Abbott would be "drafting redundancy notices" for 12,000 Commonwealth public servants if the coalition won power.

Mr Shorten said that since Mr Newman came to power in March, there had been 26,000 jobs lost in Queensland.

"Put it another way, 130 jobs are leaving Queensland under LNP rule every day since they have been elected," he said.

Mr Hockey hoped Queensland's rate would not deteriorate further but said Mr Newman had to get the state budget back to surplus.

"There is no painless way to try and fix the problems that Labor leaves," Mr Hockey said.

"We always end up fixing up their mess.

"There is nothing easy about cutting expenditure - you have to do it."

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