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Almost 15,000 jobs were created last month, but higher interest rates are expected to slow down economic growth and dampen the spectacular gains of the jobs market.

Economists say that while the labour market remains tight, employers will be more cautious about putting on new workers as economic growth slows.

The latest jobs figures from the Bureau of Statistics show 14,800 new jobs were created last month - 5300 of them full-time and 9500 of them part-time.

The jobless rate rose to 4.1% in March, compared with 4% in February, but remained near 33-year lows. The participation rate stayed steady at 65.2% for the fourth consecutive month.

The data came as AMP Banking lifted its mortgage rates for the third time in less than a month, increasing its standard variable home loans by 10 basis points to 9.47%. The lender said market volatility continued to significantly affect the cost of its own funds.

The Reserve Bank has also been urged to stop raising rates, following its decision to increase the cash rate to a 12-year high in February. Treasurer Wayne Swan has endorsed the central bank's recent moves to curb inflation, but Queensland Treasurer Andrew Fraser said recent interest rate rises had "smashed" demand in the economy.

Speaking about the economic challenges he faces when he hands down his first state budget in June, Mr Fraser said the family budget was "taking a battering". "Indeed, my assessment, and thereupon my plea, is for the Reserve (bank) to relent, to stop. I think its work is done," he said. "I think they haven't just curtailed demand, I think they've smashed it."

But so far the jobs market has not taken a battering. The ABS's data shows NSW led the job gains in March (up 34,800), followed by Queensland (up 21,000), ACT (up 500) and South Australia (up 400).

Victoria's performance was dismal, with the state losing 19,700 jobs, and the unemployment rate growing to 4.3%, from 4.1% the month before. Jobs also fell in Western Australia (down 500) and Tasmania (down 2000).

Shadow treasurer Malcolm Turnbull said Australia had a healthy labour market, "thanks to the Coalition's hard work in reforming the Australian economy", but warned that the data was a "lagging indicator", meaning it could take months for the impact of higher rates to flow through to the jobs market.

Deputy Prime Minister Julia Gillard agreed that employment growth over the past year had been strong, but expressed concern over skills and labour shortages constraining business output. "The Government's agenda is to keep employment strong, we want Australians who want to work to have the opportunity to work," she said.

The economy has added an extra 220,000 jobs since the middle of last year, and some economists are concerned that this could cause wage growth to further accelerate. But other data from the Department of Education, Employment and Workplace Relations shows that wage growth through enterprise bargaining agreements has remained relatively steady.

Quarterly wages growth for collective agreements lodged in the December 2007 quarter was 3.8%, a slight fall from the September quarter.

Wage outcomes varied among industries. Those with severe skills shortages, such as building and construction, recorded a 4.7% rise in wages, compared with the slowing retail sector, which recorded growth of 3.5%.

Economists say that as economic growth starts to slow, the unemployment rate will tick up. They point to recent data - such as smaller numbers of jobs advertised - as early indicators of a change. "The looming slowdown in employment growth should ease wage pressures by the end of this year," said Citigroup economist Shane Lee.

ANZ economist Riki Polygenis said: "Slower economic growth will eventually lead to a fall in job creation and a rise in the unemployment rate." But with widespread labour shortages, the deterioration "will be relatively muted, at least in 2008, and more protracted as companies hoard labour".

With AAP