Hopes of more interest rate cuts have taken a hit after Australia's unemployment rate plunged, reinforcing beliefs of a tight jobs market.

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Bonds traders lowered the odds of another Reserve Bank interest rate cut on Thursday and the ASX fell to its lowest level since August after the Australian Bureau of Statistics released its monthly labour force figures.

About 42,000 jobs were added to the economy in October, exceeding economist forecasts of a rise of 20,000, while the number of unemployed people fell by 17,000.

As a result, the unemployment rate fell to 4.3 per cent, unwinding a commensurate spike to 4.5 per cent the month prior.

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