Australia's unemployment rate is down to 5 per cent - its lowest level since April 2012.

The number of new jobs created in September (seasonally adjusted) was weaker than expected, but a drop in the number of people searching for work pushed unemployment down.

The number of jobs created rose by 5,600 over the month, and the growth in full-time employment of 20,300 jobs outweighed a decline in part-time work of about 14,700 jobs.

Experts say the slackness in the labour market appears to be tightening.

The underemployment rate (a measurement of people in work, but looking for more hours) is down to 8.3 per cent.

The underutilisation rate, which combines unemployment and underemployment, decreased to 13.5 per cent. This rate is considered an important indicator of wages pressure.

Economist Callam Pickering has reflected on the stats.

“It would be surprising if the unemployment rate didn't bounce higher over the remainder of the year,” Mr Pickering said.

“The monthly figures can be highly volatile and we shouldn't overreact to such a strong unemployment figure.

“The labour market has performed well recently, reducing labour market slack, but a 5 per cent unemployment rate is still a little too good to be true.”