Construction and mining sector are two of the biggest employers in Australia
The unemployment rate was 5.1% in July, the country's statistical bureau said.
There are concerns that high borrowing costs and weak
consumer spending, coupled with floods earlier in the year, have hurt
the economy.
Last week, Australia's central bank cut its annual growth forecast to 3.25% from 4.25%.
Analysts said given the current economic scenario, the unemployment rate was likely to remain high for some time.
"I think the softness in the leading indicators tells us that
employment generation going forward is not going to be enough to keep
the unemployment rate steady," said Su-Lin Ong of RBC Capital Markets.
"The fact that it has ticked up, we need to watch now whether it is the start of an upward trend," she added.
Policy easing?
Despite robust growth in the past few years, there have been
concerns about the long-term prospects of the Australian economy, not
least due to the different pace of growth of various segments.
While its mining sector continues to boom, driven by demand
from emerging markets, other parts of the economy have been facing a
slowdown.
Earlier this month, data showed that retail sales in Australia fell 0.1% in June from May, the second successive monthly drop.
Last week, the Reserve Bank of Australia (RBA) admitted that
"there is a large divergence between the mining and related sectors and
the rest of the economy".
The central bank said this difference in development was taking a toll on Australia's growth rate.
Analysts said the latest unemployment numbers may prompt the
RBA to re-examine its interest rate policy, though they warned it was
more likely that borrowing costs would stay on hold rather than fall
significantly.
"The risks for rates are moving toward an easing, though it's
not our base case that they will cut this year," said Benjamin Dinte of
Macquarie.
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