The unemployment rate remains at 5.2 per cent, despite the creation of 500 jobs in June.

The increase in jobs was greatly outweighed by 6,600 workers becoming unemployed.

There are now 711,500 unemployed people in Australia, in seasonally-adjusted figures, its highest level since August last year.

Unemployment would have crept higher but was kept down by a slight decrease in the seasonally-adjusted participation rate — the proportion of people in work or looking for it.

The silver lining is the creation of 21,100 full-time jobs.

While many expected such a result, the jobless rate is still well above the Reserve Bank's target of 4.5 per cent. It says this level would allow spare capacity in labour market to be soaked up.

The underutilisation rate — the sum of unemployed and underemployed people — fell 0.3 percentage points over the month, but is still at the high level of 13.4 per cent.

Economist Callam Pickering says it is; “A rather disappointing employment report but not one that will change the outlook for the Reserve Bank”.

“While the underutilisation rate remains high, at 13.4 per cent, stronger wage growth is unlikely,” he told reporters.

“The underutilisation needs to drop to around 12 per cent before wage growth of 3 per cent a year becomes likely.

“Other measures of the labour market, such as job vacancies and advertisements, suggest that employment growth may slow over the next six months.”

Mr Pickering said the narrow nature of employment growth is worth watching.

“We still have a two-speed labour market, New South Wales and Victoria driving growth and then everyone else,” he said.

“If conditions slow in these states, perhaps due to housing, then the overall labour market picture would deteriorate rather quickly.”