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Data released by the Australian Bureau of Statistics (ABS) on Thursday showed the unemployment rate fell to 3.4 per cent last month as employment and hours worked both decreased at the same time.

Bjorn Jarvis, head of labour statistics at the ABS, said the unemployment rate fell by 0.1 percentage points between June and July to 3.4 per cent, with employment falling by 41,000 people and the number of unemployed people also decreasing by 20,000 during the same period, reports Xinhua news agency.

"The fall in unemployment in July reflects an increasingly tight labour market, including high job vacancies and ongoing labour shortages, resulting in the lowest unemployment rate since August 1974," Jarvis said in a statement.

The July reference period coincided with the winter school holidays, worker absences associated with Covid-19 and other illnesses, and further flooding events in New South Wales, Australia's most populous state with Sydney as the capital city.

In line with the fall in employment, and continued illness-related worker absences, hours worked also fell by 0.8 per cent in July.

"In addition to people taking annual leave around the winter school holidays, there were also around 750,000 people working fewer hours than usual due to being sick in July 2022, around double the usual number we see during the middle of winter," Jarvis said.

The statistics came when the wave of Omicron sub-variant infections continued in the current winter months in Australia.

Since the outbreak of the pandemic in early 2020, Australia has reported a total of 9,851,002 Covid-19 cases and 13,021 deaths, with approximately 193,018 active cases, according to the latest data from the Department of Health.