PREMIER Colin Barnett says he "never, ever" talked about a boom in Western Australia.
He said a rise in monthly unemployment from 3.9 per cent to 4.1 per cent showed why.
While the number of people employed across Australia jumped 44,000 in March, the national unemployment rate remained steady at 5.2 per cent, thanks to a higher participation rate.
It was a similar story in WA, which saw its jobless rate rise mostly due to an increasing number of people looking for work out west.
Mr Barnett said the latest Australian Bureau of Statistics figures did not point to a slow-down in the WA economy, despite concerns over Chinese demand for its resources.
"The unemployment rate in Western Australia has been around four per cent for the last few months," he told reporters yesterday.
"That is well over one full percent(age point) below the national average, and is by far the lowest unemployment rate of any Australian state.
"If unemployment remains at around four per cent, I'll be happy - it may even go lower than that."
Mr Barnett said WA "essentially has full employment".
However, he warned the local economy still relied heavily on the resources sector, while other industries were doing it tough.
"You're seeing a slow-down in the Australian economy, and there will be sectors of Western Australia that also feel that," Mr Barnett said.
"There are problems in parts of the tourism industry, many small businesses are doing it tough, many retailers are doing it tough.
"That's why I have never, ever talked about a boom in Western Australia."
WA's Chamber of Commerce and Industry (CCI) said while the state continued to lead the nation in employment - putting on 40,000 jobs in the past 12 months compared to a net loss of 10,000 jobs across Australia - the tight labour market was driving up costs.
"Businesses rated wage costs as the biggest concern," chief economist John Nicolaou said in the CCI's latest Business Expectations survey, released yesterday.
"Input costs (material and energy costs) also rated as a key pressure on business, (while) turnover and profitability remains weak."
Mr Nicolaou described WA's wages pressures as a "prosperity problem", and said the state desperately needed more labour.