And it is going to keep softening according to RBA Governor, Glenn Stevens who said yesterday: that what happens to the jobless rate will be similar to 2001, when the economy slowed.
"I think, in many respects we could see what's happening is akin to the mid-cycle pause in 2001.
"Unemployment rose a percentage point, mid-cycle to 18 months, that sort of episode is what we're experiencing now.
"We observe the unemployment rates goes up for a little while, while inflation stabilises for a little while - that was the story in 2001.
"It's going to rise a bit in the next year to 18 months," he said.
If anything, there's now a sense that the jobless rate is weakening faster than at any time in the year with the number of job advertisements in Australian newspapers and on the internet down again in August, making the 4.9% drop the largest monthly decline in more than seven years.
Newspaper job ads are now 25.8% lower than in August 2007 having taken the brunt of the slowdown, but now internet job advertising is falling as well. But internet job ads were still 4.6% higher than they were a year ago in August 2007.
For cost and ease-of-use reasons and access, internet job ads have been more solid than newspaper ads which have been taking a pounding as the economy has slowed and sales of papers have slid.
And, while it was the largest monthly fall in around seven years, it was also the fourth consecutive monthly decline.
But for the first time in quite a while the downturn in job numbers advertised on the internet was greater in percentage terms than in newspapers.
Overall the ANZ monthly survey found the total number of jobs ads in major metropolitan newspapers and on the internet in August fell by 4.9% to an average of 249,114 per week, seasonally adjusted In August.
This follows a fall of 0.3% in July. Job ads were down 0.3% from August last year.
The number of job ads in major metropolitan newspapers fell by 4.0% last month to an average of 15,105 per week, following a decline of 5.2% in July.
But the number of jobs advertised on the internet fell 5.0% in August to an average of 234,009 per week, down from an average of 246,197 in July.
Newspaper ads have been softening all year to be down 28.5% on August last year, but internet job ads had been rather firm as they fell slowly. But now they are on the turn and that points to the overall jobs market softening much more than the official ABS labour force figures have been showing.
Because of the budget cuts the figures for July were not well received by the market, but if there's again little sign of this softening from this Thursday's series, considerable doubts will be raised by the market about the reliability
The ANZ's head of Australian economics, Warren Hogan said the overall trend in job ads continued to weaken, indicative of a significant slowing in hiring intentions across Australia in 2008.
"The recent trends in newspaper job advertisements highlight the risk of an even more rapid slowing of employment growth than previously thought."
ANZ is currently forecasting unemployment to be around 5% by mid-2009, but said it may need to adjust that figure if there are similar declines to those seen last month.
"Further declines of the magnitude seen in August may force us to revise our view that we will see only a modest rise in the unemployment rate over the year ahead," Mr Hogan said.
He said recent trends in job ads were consistent with other indicators of domestic spending which had slowed abruptly over the first half of 2008.
"This has been an important factor in the Reserve Bank of Australia's (RBA) decision to reduce interest rates this month and will most likely lead to another 25 basis point reduction before the end of the year.
"If this weakness in job advertisements flows through into rising unemployment in 2009, there will be greater scope for interest rate reductions next year."
