Employment decreased by 39,300, below expectations of a 20,000 increase, while the number of unemployed people climbed by 8,900, the Australian Bureau of Statistics reported on Thursday.
The softer-than-expected result continues the gradual easing trend that the labour market has been in since the start of the year.
The jobless rate in August was also upwardly revised from 4.6 per cent to 4.7 per cent - the highest level since October 2021.
In a read-out of its September meeting released on Tuesday, the RBA - which has raised interest rates four times during 2026 - noted that labour-market conditions had eased since August.
But leading indicators suggested the outlook for labour market conditions were broadly stable, the board said.
RBA staff were also increasingly worried that the rate of unemployment needed to keep inflation stable had risen as a result of weak productivity.
That meant that to get inflation back to target, Australians might have to get used to a higher unemployment rate than previously thought.
The jobless rate has risen by 0.6 percentage points since the start of the year and is already above the RBA's forecast of 4.5 per cent for the December quarter.
The continuing softening in the labour market comes as weak consumer confidence, growing cost pressures and higher interest rates weighed on employer hiring intentions, according to Oscar Guth, an economist at Oxford Economics Australia.
"The rise in the unemployment rate to 4.7 per cent gives the RBA more room to be patient and assess incoming inflation data before raising rates again," he said.
"This is consistent with our view that a further rate hike will come in the first quarter of next year."
But Marc Jocum, senior strategist at ETFT provider Global X, said the numbers were volatile and should be taken with a pinch of salt.
"The jobs market is beginning to lose momentum, but it is not falling off a cliff and is being heavily influenced by the volatile participation rate and ABS methodology changes," he said.
"The RBA is walking a tightrope. It needs to slow the economy enough to tame inflation without tightening the screws so far that the jobs market buckles.
"The coming months will reveal whether this is a controlled cool-down or the beginning of a more painful slowdown."
The participation rate fell by 0.2 percentage points to 66.8 per cent.
A higher proportion of people remained unemployed this September compared to recent years, ABS head of labour statistics Sean Crick said.
"This follows from last month when a higher proportion of people who were previously not in the labour force moved to being unemployed," he said.
The International Monetary Fund projected Australia's unemployment rate to hit 4.7 per cent in 2027 in its latest World Economic Outlook on Tuesday.
While the economy was proving resilient to the Middle East oil shock, vulnerabilities were growing, the fund said in a report.
Treasurer Jim Chalmers will fly to Bangkok on Thursday to join finance ministers from around the world at the IMF-World Bank annual meetings.
He will call for an end to the Middle East conflict, which is "having a devastating economic impact and is pushing up fuel prices, inflation and interest rates around the world".
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