Australia's jobs market is still weakening, official figures show, adding to the case for a further cut in interest rates next month, economists say.
Data from the Australian Bureau of Statistics (ABS) showed the unemployment had stayed steady in December, at 5.2 per cent.
The unemployment rate was revised down to 5.2 per cent in November.
HSBC chief economist Paul Bloxham said the data made a cash rate cut by the Reserve Bank of Australia more likely.
"The data shows that unemployment has been on a slow grind for some time now," Mr Bloxham said.
"I think this is still consistent with the RBA cutting interest rates next month, which is what we expect to happen.
"With the participation rate falling and employment also falling, it does look as though the labour market is still softening."
Total employment fell 293,000 to 11,421,300 in the month, according to figures released by the Australian Bureau of Statistics today.
The forecast was for total employment to have risen by 5,000 in December with the unemployment rate at 5.3 per cent, according to the median of 13 economists surveyed by AAP.
Full-time employment rose by 24,500 to 8.051 million in December while part-time employment was down 53,700 to 3.37 million, the ABS reported.
The December participation rate was 65.2 per cent, compared with an unrevised 65.5 per cent in November.
The participation rate was forecast to be 65.5 per cent.
The Australian dollar dropped about one third of a US cent after the ABS released the latest job data.
CMC markets foreign exchange dealer Tim Waterer said the headline reading of 29,000 jobs being shed prompted the sell-off.
"The break-down showed there as a decent rise in full-time jobs," Mr Waterer said.
"24,000 full times jobs were created and the reason for the headline numbers was part time jobs lost.
The dollar bounced back quickly before slipping again.
The figures released at 1130 AEDT showed unemployment dropped to 5.2 per cent, in-line with market expectations.
Total employment fell 293,000 to 11,421,300 in the month.
At 1129 AEDT, prior to the data release, the dollar was at 104.23 US cents before dropping to 103.94 US cents 1131 AEDT.
It had recovered slightly by 1134 AEDT, climbing back up to more than 104 US cents before dropping again to 103.94 at 1143 AEDT. By 1155 (AEDT) it was at 104.04
"The other shining light you can read in that was a fall in the unemployment rate," Mr Waterer said of the ABS figures.
He said he expected to see the Australian dollar recover throughout the afternoon.
ICAP senior economist Adam Carr said the data showed that employers were behaving cautiously in anticipation of a possible global downturn.
"We're neither creating jobs nor seeing massive jobs shedding," she said.
"I think employers are holding back from hiring to see what happens in Europe."
He said the unemployment figures did not suggest large scale job-losses were on the horizon, noting that the number of aggregate hours worked actually rose in December.
"These aren't numbers which suggest that we should expect a bout of massive jobs shedding."
"If there was something more ominous we would be seeing hours fall and wouldn't be seeing full-time job creation."
Mr Carr said the data would not increase the likelihood of a cut to interest rates next month.
"The way I think the Reserve Bank will look at the labour market is that it hasn't changed.
"Job creation has stalled but we're not seeing massive job shedding and the unemployment rate has been unchanged.
"If they do cut, it will be in response to events in Europe and, maybe, the cost of funding pressure.
"But just looking at the economic data there is no reason why they would cut."
