Top banks fell and department store Myer was down 2 percent after the report showed employment fell 9,700 in August in a second straight month of soft results.
The Australian dollar lost about half a US cent on expectations policymakers might consider lowering interest rates.
"It's not good for the sharemarket but the silver lining is that it increases the prospects that rates are coming down," said Shane Oliver, head of investment strategy at AMP Capital Investors.
"These figures are warning us that we have to get rates down," he said.
Australia's benchmark S&P/ASX 200 index , which had gained 0.8 percent in earlier trade, was down 13 points at 4,170.4 after the employment report. It rose 2.7 percent, or 107.9 points, on Wednesday.
New Zealand's benchmark NZX 50 index rose 0.4 percent to 3,312.8.
STOCKS ON THE MOVE:
Retailers mostly fell after the job report, with Woolworths down 1.1 percent, Coles owner Wesfarmers down 0.8 percent, and Myer down 2 percent.
0230 GMT
Top banks were all weaker, led by Commonwealth Bank of Australia with a loss of 1.4 percent. National Australia Bank outperformed with a fall of only 0.2 percent after a report said its potential exit from Britain through the sale of its UK operations is not imminent. See .
Chinalco Yunnan Copper Resources , an Australian affiliate of Yunnan Copper Industry (Group) Co, rose 5 percent after it teamed up with Anglo-Australian miner Rio Tinto to explore for copper in Chile.
Aquila Resources was on halt after An Australian court blocked a move by Brazil's Vale to force Aquila to vote on a coal project plan, a vote that could have opened the way for Vale to buy out Aquila from the $1.4 billion project.
Foster's was up 0.2 percent at A$4.85 after Australia's takeovers watchdog on Thursday rejected efforts by SABMiller's to force a review of the financial statements of Foster's Group , which is battling a $10 billion takeover bid. See.
Copyright Reuters, 2011