The Australian Bureau of Statistics said the seasonally-adjusted jobless rate increased from 5.1 percent in May as full-time employment dropped sharply and the number of people seeking work also fell.

The headline rate was in line with expectations but the number of jobs lost was worse than predicted, with analysts forecasting 10,000.

The Australian dollar fell from US$1.0240 to $1.0211 on the data, which was seen as increasing the case for an interest rate cut.

Australia's central bank held the official interest rate steady at 3.50 percent this month following two rounds of cuts -- 50 basis points in May and 25 points in June -- in a bid to stimulate the economy.

Though robust mining exports to Asia have driven strong Australian growth, the associated lift to its dollar has hit local industries hard, with manufacturing, tourism and education suffering.

Retailers are also feeling the pinch, with confectionery company Darrell Lea going into administration this week, putting 700 jobs at risk.