The unemployment rate is expected to have hit a four year high in August as businesses held off on hiring until after the federal election.

Official labour force figures will be released on Thursday morning, and the median forecast from an AAP survey of 11 economists is for the unemployment rate to rise to 5.8 per cent, from 5.7 per cent in July.

Unemployment hasn't been that high since August 2009.

The number of people with jobs is expected to have risen by 10,000 in August, compared to a fall of 10,200 in July.

But JP Morgan Australia chief economist Stephen Walters said jobs growth of 10,000 a month is not enough to absorb the increase in population and keep the unemployment rate from rising.

"It is possible that firms held back hiring decisions close to the federal election, which would depress the August numbers," he said.

"It is difficult to disentangle the impact of an election from the prevailing macro backdrop of the time, but there is circumstantial evidence of a pre-election hiring stall in one recent case."

Mr Walters there was a similar pattern ahead of the November 2007 election, when Labor's Kevin Rudd defeated the then prime minister John Howard.

"A previously strong run of employment was interrupted by a brief contraction in hiring, which was then followed by six months of jobs growth after the election result," he said.

NAB chief economist Alan Oster said he expects the labour market to weaken further as the Australian economy transitions away from being driven by mining and resources investment.

"Underlying business investment declined with second quarter capital expenditure giving no hint of a pick-up outside the mining sector," he said.

"Domestic demand continues to struggle, with retail trade remaining weak into July, although sentiment in the housing market has improved."

The expected rise in the unemployment rate is backed up by the latest ANZ job ads survey, released on Monday.

Job advertisements on the internet and published in newspapers fell two per cent in August, seasonally adjusted, to their lowest point since the global financial crisis.

ANZ chief economist Ivan Colhoun said there were signs hiring could improve in the months ahead.

"Activity in the housing market has continued to improve recently, with increases in house prices likely to support a pick-up in the construction industry, traditionally a large employer," he said.

"With anecdotal evidence suggesting business and consumer sentiment have been weighed down by uncertainty surrounding the election campaign, there is potential for a pick-up in sentiment following the election but whether this will be sustained is a key question."

The participation rate - the percentage of the working-age population either in work or looking for a job - is expected to rise to 65.2 per cent in August, from 65.1 per cent in July.

 

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