THOUSANDS more Far Northern people left the dole queue last month, but the total workforce also decreased by thousands in a strange quirk of statistical collation.

About2600 people stopped collecting benefits, with the unemployment rate falling to 7.2 per cent. But the number of people working also fell, by 7600 people.

There were 10,700 unemployed, down from 13,300 in December and 12,500 in January last year. Howeverthose in work fell from 145,200 in December to 137,600 last month. A year ago there were 129,700 in the workforce.

The unemployment rate of 7.2 per cent is an improvement on December (8.4 per cent) and January last year ( 8.8 per cent), but is still above the state and national averages of 5.9 and 5.4 per cent. Herron Todd White research director Rick Carr said it was difficult to explain the latest figures from the Australian Bureau of Statistics.

"There's a wobble in the numbers because it is survey-based and there are small sample sizes," he said.

"It's a reversal of last month, when both employment and unemployment went up. This time they both have gone down.

"The bottom line is employment normally goes down at this time of the year, post-Christmas and Boxing Day retail sales, and the tourism industry winds down for the low season."

However, Mr Carr said there was more faith in business and in the economy. "There's a lot more confidence and job prospects than 12 months ago," he said.

Cairns-based senator Jan McLucassaid the unemployment rate had been "bouncing around for some months now".

"It does seem to be trending downwards, which is a good sign, but it is concerning to see the number of people employed also drop quite significantly," she said.

"The tourism industry has had a solid few months, and there is confidence returning among operators.

"Of course we look forward to a good year ahead for the tourism industry, with direct flights from China providing some great opportunities."

Cairns Chamber of Commerce chief executive officer Debbie Hancock said while the monthly rates were subject to variation and volatility, "these good results are certainly in the right direction".

"The challenge is that we saw a reduction in the number of people employed in the region during January 2013 (137,600, down from 146,200 in December 2012)," she said.

"Although the statistics appear to indicate fewer people in work, the month-to-month data is easily skewed by change in persons surveyed.

"We expected that casual employment over Christmas would start to reduce in January as people relocate, commence school and prepare for university, among other factors. It is important to note that 'not in labour force' doesn't mean out of work, it means choosing not to participate in work or looking for work."

Chamber of Commerce and Industry Queensland Far North policy council chairman Brett Mollersaid the latest figures were further evidence that the economy had "hit the bottom of the cycle".

"While an increase can be expected in unemployment numbers in December/January as school leavers and university graduates look for employment, to see a lower rate of unemployment we can be heartened that business is finding a pulse that will strengthen as we lead further into the new year," he said.

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