Australia's employment growth has exceeded expectations, with the number of people employed in September increasing significantly.

The Australian Bureau of Statistics says 49,500 overall new jobs were created in September, more than double the 20,000 jobs predicted by analysts.

The Australian dollar jumped after today's announcement, reaching a new two-year high of 98.35 US cents from an early 97.65 US cents.

The share market also reacted positively with the All Ordinaries up six points at 4,743 and the ASX 200 up three points at 4,689 at 1:10pm (AEDT).

The rise in employment was driven by an increase in full-time employment, leaving Australia's unemployment rate unchanged at 5.1 per cent in September.

There were 55,800 new full-time jobs in September, offsetting a fall of 6,300 part-time positions during the month.

The participation rate, or the proportion of people in work or looking for work, increased by two percentage points to 65.6 per cent.

Analysts at Westpac say the Australian economic recovery has been "jobs rich" and is expected to continue.

The Federal Government has acknowledged the better than expected job figures will have an impact on interest rates and the Australian dollar.

Federal Jobs Minister Chris Evans says it shows the strength of the Australian economy.

"Obviously there are impacts on the value of the dollar and interest rates which will be governed by the Reserve Bank, but what we're seeing is the Australian Government's stimulus plan really bringing home job opportunities for Australians," he said.

Earlier this week, the ANZ Job Advertisement Series showed job ads had increased by 0.7 per cent in September, marking the fifth straight month of increases.

Job ads were up 32 per cent over the year, showing considerable momentum in the labour market.

Australia's unemployment rate of 5.1 per cent is significantly lower than the US, Europe and Canada, where the unemployment rate is close to 10 per cent.

Economists say the Australian job market performed better than those of other advanced economies because employers were battling a skills shortage prior to the global financial crisis.

This means that they cut hours rather than jobs during the financial downturn.

Westpac chief economist Bill Evans says the skills shortage is starting to resurface.

"We are already looking at skills shortages, particularly in the mining sector," he said.

Economists predict the new unemployment figures will renew expectations that the Reserve Bank will raise interest rates at its next meeting on November 2.

The central bank surprised markets and economists alike by deciding to leave its official cash rate unchanged at 4.5 per cent this week.

CommSec chief economist Craig James says the chance of a November rate hike has increased from 38 per cent to 67 per cent.

"While the economy is patchy and there are doubts on the global economy, it [RBA] may not be able to take chances on inflation remaining low with the job market tightening," Mr James noted in a statement.

He pointed out that the latest jobs data sent a "wake-up call" to the Government, indicating that Australia needs more migrants.

"If we want to keep down both wage pressures and interest rates, then labour supply needs to increase and that means more migrants," he said.

"Over the past year migrant numbers have fallen at the fastest rate on record - that is certainly not a desirable outcome, with fewer young Australians to fill positions."