Jobs growth bounced back in April but the labour market has softened since the rapid growth of 2017, and economists expect the trend to continue.
There were 22,600 more people with jobs in April, more than the 20,000 expected by economists, with the growth all coming in full-time positions, seasonally adjusted figures from the Australian Bureau of Statistics show.
That follows two months of falls in employment, and takes the increase in job numbers for the first quarter of the 2018 to 52,900, after a rise of over 400,000 in 2017.
The unemployment rate rose to 5.6 per cent in April, from 5.5 per cent in March.
AMP Capital senior economist Diana Mousina said this was due to a slight rise in the participation rate - a measure of the number of people working or looking for work - to 65.6 per cent.
"Participation in the labour market remains high, which is a positive sign of labour market strength, but the rise in the participation rate caused the unemployment rate to rise to its highest level for 9 months," she said.
"The small rise in the unemployment rate is not a concern given that other measures of the labour market are holding up well."
The number of hours worked rose by 1.1 per cent in April and was up 5.4 per cent over the year, the strongest annual gain in 18 years.
BIS Oxford Economics head of macroeconomics Sarah Hunter said slower job creation was not a surprise.
"The labour market was always set to cool after such a strong 2017," she said.
"But such a sharp slowdown is an indication that jobs growth jumped the gun on output growth last year."
Ms Hunter expected jobs growth to remain subdued for at least the rest of 2018, given weak retail figures in the March quarter and the coming downturn in residential construction.
NSW was the strongest performing state, with a 27,100 more people employed, followed by Western Australia, up 8,300, and South Australia, improving 2,700.
Victoria had the largest fall, with 10,000 fewer people in work, followed by Queensland, down 8,200.
Australia's youth unemployment rate rose 0.2 per cent, on a seasonally adjusted basis, to 12.6 per cent.
National Australia Bank markets chief economist Ivan Colhoun said the Reserve Bank of Australia would see the jobless data as an indication that spare capacity remains in the labour market, increasing the chances that it will keep interest rates on hold for longer than expected.