Prime Minister Scott Morrison has warned employment figures will get worse, even as 600,000 jobs were confirmed lost in April as a result of the coronavirus pandemic.
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The jobless rate spiked to 6.2 per cent from 5.2 per cent in March, the highest level since July 2015, and according to economists at Commonwealth Securities the biggest one-off increase on record.
"This is a tough day for Australia. A very tough day," Prime Minister Scott Morrison told reporters in Canberra on Thursday.
"It's terribly shocking although not unanticipated."
While the jobless rate rise was smaller than what economists had expected, Treasury has forecast the unemployment rate will rise to 10 per cent in the coming months.
"We anticipate that those figures will get worse," Mr Morrison later told parliament during question time.
"That's why the programs we have put in place through the JobKeeper program, through the JobSeeker program ... (are) designed to ensure that Australians can get through this crisis and we can get to the other side."
Economists had been expecting an initial rise in the unemployment rate to be over eight per cent, a level not seen since the aftermath of the last recession in the early 1990s.
Treasurer Josh Frydenberg said the significant difference between expectations and reality "reflects the success of the JobKeeper program".
JP Morgan economist Tom Kennedy said it is highly likely the data understates the true extent of the deterioration across the labour market.
"This owes, in part, to the government's JobKeeper and JobSeeker programs ... to limit labour-market damage and prevent widespread job shedding," he said in a note to clients.
Mr Morrison said six million people are benefiting from the $130 billion JobKeeper program that allows businesses to keep workers on their books through a fortnightly payment of $1500.
Treasury has estimated that 850,000 people will be rejoining the workforce once the three-stage plan to lift COVID-19 restrictions is fully implemented.
"The task now is to reopen these businesses to get employees back into their jobs and to do so in a COVID-safe way so that it is sustainable," Mr Morrison said.
While the unemployment rate was smaller than expectations, Labor still thought the result was "frightening".
The Australian Bureau of Statistics said 594,300 people lost their job between March and April, comprising 220,500 full-time workers and 373,800 part-timers.
The underemployment rate - which measures employed people seeking additional work - soared by 4.9 per cent to 13.7 per cent.
"This is just the beginning of what is going to be increasingly frightening figures," Labor's employment spokesman Brendan O'Connor told reporters.
BIS Oxford Economics chief economist Sarah Hunter agreed it is likely there will be further falls in employment in May, as the full impact of the crisis plays out.
"But with restrictions being lifted and activity able to gradually begin recovering in all states (the June quarter) should be the trough before the recovery takes hold," Dr Hunter said.
However, that assumes there is no second wave of infections which forces lockdown conditions to be reimposed.
Australian Associated Press
