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Australia's unemployment rate unexpectedly dropped to 4.2 per cent in December, its lowest level since August 2008 and sparking speculation of a rise in the official cash rate later this year.

Economists had predicted the jobless rate easing to 4.5 per cent from 4.6 per cent in November.

The decline was even faster than the Reserve Bank of Australia had been expecting just a few months ago and had not expected to hit 4.25 per cent until the end of 2022.

The Australian Bureau of Statistics said 64,800 people joined the workforce in December in a further recovery from last year's COVID-19 lockdowns in NSW, Victoria and the ACT.

The data did not take into the account the impact of the Omicron variant in the latter stages of December and into January.

Treasurer Josh Frydenberg latched on to the figures, noting the unemployment rate is now equal fourth-lowest since the ABS started printing monthly figures in 1978.

"We know there are great pressures at the moment, but we also know that the economy is very resilient, and a standout performer has been the labour market where jobs, jobs, and more jobs have been created," he told reporters in Melbourne on Thursday.

But deputy Labor leader Richard Marles said if Prime Minister Scott Morrison tries to claim these figures are "mission accomplished" in this election year, "it would be a complete fantasy".

"If anything, they highlight exactly what is being put at risk by this government's failure to manage the Omicron wave," he told reporters.

But business and economists are hopeful that the impact from Omicron will be short-lived.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said there are labour and skills shortages across many sectors.

This emphasised the need for government to boost workforce participation by investing skills and establishing an ambitious skilled migration program, he said.

"Whilst we can expect Omicron to disrupt these strong (job) gains in early 2022, these pressures are likely to quickly re-emerge as case numbers begin to fall," he told AAP.

BIS Oxford Economics chief economist Sarah Hunter said experience from overseas suggests the impact of Omicron will be significant but short-lived, and less economically damaging than previous waves.

"Overall, the unemployment rate is set to remain below 4.5 per cent this year, and with businesses still looking to add staff this will create further upward pressure on wages and domestic inflationary pressure," Dr Hunter said.

"Today's data reinforces our view that the RBA will tighten the cash rate much earlier than they are currently signalling."

Inflation figures for the December quarter are due on Tuesday.

Separately, new data showed that while Australians had intended to spend big heading into 2022, there are already signs those expectations won't be met due to the impact of Omicron.

The Commonwealth Bank of Australia's household spending intentions index rose 2.5 per cent in December, its highest level since the survey began in July 2017.

The biggest gains were in travel, transport and retail sectors.

The index combines an analysis of CBA payments data, loan applications and publicly available search activity on Google Trends.

CBA senior economist Belinda Allen said household spending data for December showed a sustained recovery from the Delta lockdowns, fuelled by accumulated household savings estimated at some $260 billion.

"(But) we can see from our high frequency credit and debit card data there does appear to be a fall in spending in January, with spending on services more impacted than goods spending," she said.

© AAP 2022

Prospective parents are rejoicing at the Victorian government's decision to reverse a ban on most IVF treatments during the escalating Omicron coronavirus wave.

Acting Health Minister James Merlino announced some services will restart from Thursday, while hospitals are scaling up their operations to enable procedures to resume from 11.59pm on Tuesday.

IVF clinics were contacted by authorities earlier this month to cancel appointments as part of a pause on elective surgeries in response to the rising number of COVID-19 hospitalisations.

The move attracted criticism from Prime Minister Scott Morrison, state Opposition Leader Matthew Guy, IVF clinics, patients and the community, with an online petition garnering almost 140,000 signatures.

Mr Merlino said he received advice from the chief health officer that restrictions on IVF procedures could be removed, given the workforce's specialist nature, facilities and equipment were not currently imperative in the pandemic response.

The health department will work with the Royal Women's Hospital to prioritise urgent patients, ensuring the changes do not affect its resources for COVID-19 patients.

Mr Merlino and Premier Daniel Andrews apologised for the distress caused by the pause.

"There's a process going on at the moment to review the advice and a number of other day surgery and day procedures. So, hopefully, I can make some announcements next week to add to that list," Mr Andrews told reporters.

Tiana Clayworth, 28, has gone through seven IVF cycles since 2020 after testing confirmed it was the only way she and her partner could conceive.

The Melburnian was preparing for another round when the clinic informed her of the pause.

"I'd started all that build-up. It was a blow to stop," she told AAP.

Her treatment will now be able to proceed in the next few weeks as planned but she said the interruption caused her emotional trauma, on top of the typical trials associated with each course.

Monash IVF medical director Luk Rombauts said one in seven couples experience fertility issues and staff could only provide services to about one per cent of patients during the pause.

Carve-outs for patients were limited to those who had already taken their IVF drugs before January 6 and those about to have chemotherapy, which can destroy egg reserves.

Prof Rombauts, who is also president of Australia and New Zealand's Fertility Society, commended the Victorian government for "listening" to pleas to overturn the pause, the first of its kind in the state since the first wave of the pandemic.

"I've already spoken to quite a lot of patients and they're all extremely grateful for the government setting something right," he said.

Prof Rombauts says women who already have their eggs "on ice" can start their course straight away, meaning the two-week stoppage will not create a patient backlog.

Melbourne IVF medical director Fleur Cattrall also welcomed the reversal, noting a continued ban could have cost some Victorians their chance to have a baby.

Opposition Leader Matthew Guy said the ban should never have happened in the first place.

© AAP 2022

Australia's unemployment rate unexpectedly dropped to 4.2 per cent in December from 4.6 per cent the previous month, its lowest level since August 2008.

The Australian Bureau of Statistics said 64,800 people joined the workforce in December in a further recovery from last year's COVID-19 lockdowns in NSW, Victoria and the ACT.

"Recovery in NSW and Victoria continued to have a large influence on the national figures, with employment in these two states increasing by 32,000 and 25,000 people between November and December," ABS head of labour statistics Bjorn Jarvis said.

This takes employment back to where it was in May for these two states.

Mr Jarvis said the latest report provides an indication of the state of the labour market in the first two weeks of December, before the large increase in virus cases later in the month.

BIS Oxford Economics chief economist Sarah Hunter said experience from overseas suggests the impact of the Omicron variant will be significant but short-lived, and less economically damaging than previous waves.

"Overall, the unemployment rate is set to remain below 4.5 per cent this year, and with businesses still looking to add staff this will create further upward pressure on wages and domestic inflationary pressure," Dr Hunter said.

"Today's data reinforces our view that the RBA will tighten the cash rate much earlier than they are currently signalling."

At 4.2 per cent it is the lowest since August 2008 and just before the start of the global financial crisis when it was 4.0 per cent.

Economists had predicted the jobless rate falling to 4.5 per cent in December.

The fall in the unemployment rate is far quicker than the Reserve Bank of Australia had been expecting.

In its most recent economic forecasts released in November, the RBA had predicted an unemployment rate of 4.75 per cent by the end of 2021 and only at 4.5 per cent in the middle of 2022.

Separately, new data showed that while Australians had intended to spend big heading into 2022, there are already signs those expectations won't be met due to the impact of Omicron.

The Commonwealth Bank of Australia's household spending intentions index rose 2.5 per cent in December, its highest level since the survey began in July 2017.

The biggest gains were in travel, transport and retail sectors.

The index combines an analysis of CBA payments data, loan applications and publicly available search activity on Google Trends.

CBA senior economist Belinda Allen said household spending data for December showed a sustained recovery from the Delta lockdowns, fuelled by accumulated household savings estimated at some $260 billion.

"The boost in the travel and transport sector also reflect increased mobility around the country in December," she said.

However, Omicron led to a surge in cases late in December and into January.

"We can see from our high frequency credit and debit card data there does appear to be a fall in spending in January, with spending on services more impacted than goods spending," she said.

© AAP 2022