Figures released by the Australian Bureau of Statistics data show that the jobless rate jumped to 5.2 per cent in February, from 4.8 per cent in January, as economic growth deteriorated.
At the 4.15pm (AEDT) close, the benchmark S&P/ASX200 index was 8.9 points, or 0.27 per cent lower, at 3235.5 while the broader All Ordinaries index dipped 8.7 points, or 0.27 per cent, to 3190.4.
City Index Australia markets strategist Alex Douglas said trading on the local bourse was relatively flat.
"Some of the initial excitement from the financial (sector's) gains in the US has worn off, and we're really just chopping sideways now,'' he said.
"Even the employment data today hasn't really done a great deal for the market today in either direction.''
Mr Douglas said the property sector performed well, as investors looked for bargains after recent heavy selling.
The banks were mixed.
NAB lifted 43 cents to $16.73 as it said it would slash its first half dividend by about 25 per cent, boost its Australian business and consider potential acquisitions thrown up by the global financial crisis.
Mr Douglas said that despite the dividend cut, investors appeared to be satisfied with NAB's overall strategy.
ANZ fell 29 cents at $12.86, Westpac lost 27 cents to $16.60, and Commonwealth Bank gained six cents to $28.67.
Resources were also confused after a choppy day of trade.
BHP Billiton retreated 15 cents to $30.35, and Rio Tinto strengthened 37 cents to $50.17.
Nickel producer Western Areas climbed 27 cents to $3.56 after it signed an offtake and $45 million financing agreement with BHP Billiton.
Energy stocks followed the trend.
Oil and gas producer Woodside Petroleum surrendered $1.01 to $35.98, and Santos picked up 8 cents to $16.00.
On Wall Street overnight, the Dow Jones Industrial Average rose 3.91 points to 6,930.4, with profit-taking eating into early gains.
On the Sydney Futures Exchange, the March share price index futures contract was two points higher at 3231 on a volume of 20,457 contracts, according to preliminary calculations.
More to come.
Shares higher on China resource boost
