Just over 490,000 people were registered as unemployed in January, with 65,000 of those attending a government training course.
The sectors worst hit were health, retail and tourism. Older workers once again fared badly but youth unemployment fell slightly.
Unemployment is particularly high in Vienna - especially among non-Austrian citizens. 141,718 people are currently unemployed in Vienna, an increase of 9.9 percent compared to one year ago.
Unemployment among foreigners increased by 17 percent, mainly due to the number of unemployed refugees. 58,000 unemployed foreigners live in Vienna.
Petra Draxl, the head of the AMS (public employment service) in Vienna, said it was time to learn from the example of large German cities such as Berlin, Cologne or Hamburg, which have relatively low unemployment.
Multicultural Berlin reduced its unemployment rate from 12 to ten percent within two years, using targeted measures. Draxl said that Berlin and Hamburg have set up “youth career agencies”, which advise young people on how to transition from school to the workplace. She added that Germany is also better at identifying asylum seekers' skills and supporting them whilst they learn German.
Social Affairs Minister Alois Stöger said that although the increase in unemployment figures was less than in previous months there is little sign of an upward trend in the labour market. That's despite the addition of 34,000 new jobs over the past 12 months.
Overall Austria's unemployment rate remains the 5th lowest in the European Union at 5.8 percent using the EU's method of calculation, well below the EU average of 9.1 percent.