Sydney  - More evidence appeared Thursday of Australia escaping the worst of the global recession as unemployment remained steady in July at 5.8 per cent of the workforce.

Although full-time positions fell by 16,000, there was a rise of 24,500 in the number of new part-time jobs, the government's Australian Bureau of Statistics said. There were 655,000 people out of work - the same number as in June.

RBC Capital Markets economist Su-Lin Ong said employers were warehousing surplus staff in readiness for better times by shifting them from full-time to part-time jobs.

"We're getting a cutback in hours, we're getting more part-time jobs - all of that designed to help keep costs down as the economy slows but to still retain that essential labour for when things pick up again," she said.

Most economists had predicted a loss of 18,000 jobs and a rise in unemployment to 6 per cent.

Ong joined other economists in predicting that unemployment would not reach the government's forecast peak of 8.5 per cent because employers are cutting hours rather than jobs.

The better-than-expected figures increased the chances that the Reserve Bank of Australia would be obliged to lift interest rates to choke off inflation.

St George Bank economist Amanda Tan said she expected dole queues to lengthen as the year progressed but not stay the hand of the central bank in its monetary policy.

"We don't think increases in the unemployment rate would be a major obstacle in terms of the Reserve Bank raising interest rates next year," she said.

The opposition Liberal Party said the government should respond to continuing buoyancy in the job market by reducing the amount of money it was borrowing to fund stimulus packages.

Prime Minister Kevin Rudd has gone deeply into debt to fund massive hand-outs he said would help Australia skirt a recession. (dpa)