Australia's jobs market has continued to strengthen, with unemployment remaining at 3.9 per cent last month and underemployment falling to a 14-year low.

The latest monthly Bureau of Statistics figures estimate 60,600 extra people were employed in May, driven entirely by full-time jobs.

The number of people considered officially unemployed increased by 7,800, as more people entered the labour force.

The strength of the jobs market has seen the underemployment rate hit a 14-year low, dropping from 6.1 per cent to 5.7 per cent.

With the unemployment rate sitting close to a 50-year low, the under-utilisation rate has tumbled to a 40-year low.

"At this point of the cycle, with the unemployment rate at a near 50-year low, this is an outstanding result," Callam Pickering, APAC economist at global job site Indeed, said.

"Particularly given the growing concerns around inflation and higher interest rates.

"The next 12 months won’t be easy, but we enter this challenging period from a really strong position that will hopefully allow households and businesses to weather the storm."

More people joining the labour force

In May, as more people entered the labour force to look for work, the participation rate rose to a fresh record high, up from 66.4 per cent to 66.7 per cent.

That growth in the size of the labour force explains why the unemployment rate remained steady at 3.9 per cent, because it offset the strong growth employment growth.

Bjorn Jarvis, head of labour statistics at the ABS, said: "The increase in May 2022 was the seventh-consecutive increase in employment, following the easing of lockdown restrictions in late 2021."

"Average employment growth over the past three months (30,000) continues to be stronger than the pre-pandemic trend of around 20,000 people per month," he said.

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