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Australia's unemployment rate has fallen to its lowest level in almost 50 years.

According to labour force data published by the Australian Bureau of Statistics (ABS) on Thursday, the official unemployment rate in June was 3.5 per cent, down from the 3.9 per cent recorded for the previous three months.

"This is the lowest unemployment rate since August 1974, when it was 2.7 percent and the survey was quarterly," Bjorn Jarvis, ABS head of labour statistics, said in a media release.

Jarvis said the large fall in the unemployment rate this month reflects more people than usual entering employment and also lower than usual numbers of employed people becoming unemployed.

"Together these flows reflect an increasingly tight labor market, with high demand for engaging and retaining workers, as well as ongoing labour shortages," Xinhua news agency reported quoting Jarvis.

An estimated 88,400 jobs were added to the economy in June, which marks the eighth consecutive monthly increase, following the easing of restrictions after the Covid lockdowns in late 2021.

However, the total number of hours worked by Australians fell slightly between May and June. The drop was attributed to a surge in coronavirus cases forcing more workers to isolate.

"In line with large numbers of Covid cases in June, the number of people working reduced hours due to illness continued to be high. This reflected ongoing disruption associated with the Omicron variant and cases of influenza," Jarvis said.

He said there were around 780,000 people working fewer hours than usual due to own illness in June 2022, almost double the usual number seen at the start of winter in the country.