At the 4.15pm (AEDT) close, the benchmark S&P/ASX200 index was 5.8 points, or 0.12 per cent, lower at 4814.2 points, while the broader All Ordinaries index had dipped 4.3 points, or 0.09 per cent, to 4825.5 points.
 
On the Sydney Futures Exchange, the March share price index futures contract was down seven points at 4812 points on volume of  29,958 contracts, according to preliminary calculations.
 
Labour data for February showed that the unemployment rate rose to 5.3 per cent, from a downwardly revised 5.2 per cent in January.
 
CMC Markets market analyst David Taylor said it was expected the unemployment rate might stall for a short while before falling again, and the February jobs data had little effect on the sharemarket. 
Mr Taylor said "the real issue'' today was China's inflation figure, which came in higher than expected at 2.7 per cent.
 
"The (Chinese) economy is probably growing a little faster than expected,'' Mr Taylor said.
 
"We know from past experience that they (Chinese officials) don't mess about with inflation.''
 
Mr Taylor said local investors seemed uneasy about further monetary tightening being implemented in China in an attempt to restrain inflation.
 
Putting the brakes on the Chinese economy could temper demand for resources from Australia.
 
"I think the shift of investors into defensive plays today is reflective of a bit of nervousness around that,'' Mr Taylor said.
 
In the resources sector on the local bourse, global miner BHP Billiton was down 23 cents to $43.01 and Rio Tinto was up 20 cents to $75.55.
 
Oil and gas producer Woodside Petroleum eased 22 cents to $45.27 and Santos shed three cents to $13.87.
 
Cooper Energy was off 1.5 cents at 49.5 cents after it said flooding in the Cooper Basin was likely to affect its South Australian operations as roads were cut and oil fields isolated.
 
Among the major banks, National Australia Bank sagged five cents to $26.75, Westpac retreated 33 cents to $27.00, Commonwealth Bank added 11 cents to $55.80 and ANZ found 12 cents at $24.06.
 
On Wall Street overnight, the Dow Jones Industrial Average index lifted 2.95 points, or 0.03 per cent, to 10,567.33 points.
In the gold sector, Lihir was eight cents lower at $2.90 and Newcrest was down 28 cents to $33.90.
 
The price of gold at 4.20pm AEDT was $US1107.80 per fine ounce, down $US18.55 on yesterday's closing price of $US1126.35.
 
Among retail stocks, Myer Holdings slipped three cents to $3.44 after it downgraded its full-year sales growth target.
 
Woolworths was 16 cents richer at $28.36 and Wesfarmers, which owns Coles, ascended six cents to $32.29.
 
Telco Telstra was up eight cents to $3.07.
 
In the media sector, News Corp was four cents weaker at $18.26 and its non-voting stock lifted eight cents to $15.58.
 
Consolidated Media was steady at $3.19 and Fairfax gained 1.5 cents to $1.755.
Among other stocks, internet service provider iiNet nudged up one cent to $2.24 after it said it was in talks with rival Netspace about a takeover.
 
Centro Retail Group was 0.5 cents lower at 16.5 cents after it appointed Robert Tsenin as chief executive.
 
Online wagering and gaming firm Centrebet International was down seven cents to $1.70 after it said it first became aware of takeover proposals in February but only told the market this week for reasons of confidentiality.
 
The top-traded stock by volume was information technology firm Mooter Media, with 160.5 million shares worth $3.13 million changing hands. Mooter was 0.2 cents higher at 1.9 cents.
 
Preliminary national turnover was 2.42 billion shares worth $4.83 billion, with 494 stocks up, 546 down and 382 unchanged.