Over half-a-million jobs lost in April
Australia's unemployment rate jumped to a seasonally-adjusted 6.2 per cent in April after the economy lost a record 594,300 jobs during the month following coronavirus-related lockdowns.
The rise in the unemployment rate - from 5.2 per cent in March - reflects the full monthly impact of strict social distancing measures imposed in late-March which led to widespread business closures.
There was a decrease of 220,500 jobs in full-time work and 373,800 people in part-time employment, figures from the Australian Bureau of Statistics showed on Thursday.
While a record rise, the spike in the jobless rate was lower than expected.
Economists, on average, had forecast the unemployment rate to jump to 8.2 per cent with around 575,000 jobs lost in the month.
The lower rate was likely explained by a significant drop in the participation rate - or the percentage of people looking for work, which fell by 2.4 percentage points to 63.5 per cent, reflecting the weak job market conditions.
This was underlined by the underemployment rate - or the rate of people looking for more working hours - jumping 4.9 percentage points to 13.7 per cent and the under-utilisation rate also spiking 5.9 percentage points to 19.9 per cent.
BIS OE chief economist Sarah Hunter said the dislocation in the labour market has been spread across employment, total hours worked, the unemployment rate and the participation rates.
"The fall in hours is the best indicator for the overall impact on labour supply and output," she said.
That measure makes for dismal reading.
ABS data showed hours worked in April, in seasonally adjusted terms, were down 9.2 per cent from the previous month - double the decrease in employed people.
But the impact was also likely capped partly due to the government's $130 billion JobKeeper wage subsidy program under which businesses keep workers on their books during the crisis with a fortnightly payment of $1500.
The ABS estimated that a combined 2.7 million people were affected by either job loss or having their hours reduced for economic reasons between March and April.
The biggest rise in unemployment was in Tasmania, where the jobless rate rose to 6.2 per cent - in line with the national rate - from 4.9 per cent.
Queensland hit 6.8 per cent, from 5.7 per cent, while New South Wales rose to 6.0 per cent, from 4.9 per cent.
Victoria's jobless rate also rose to 6 per cent from 5.2 per cent, South Australia hit 7.2 per cent from 6.3 per cent, Western Australia 6 per cent from 5.4 per cent, Northern Territory 6 per cent from 5.5 per cent, while the Australian Capital Territory rose to 4.2 per cent from 3.2 per cent.
South Australia now has the highest unemployment rate in the country, with Queensland not far behind, while the ACT has the lowest.
Economists, like policymakers, believe the worst is yet to come
The Reserve Bank last week forecast Australia's gross domestic product could shrink by 10 per cent in the first half of 2020, with unemployment hitting 10 per cent by June and staying elevated through 2021.
Economic numbers would get worse before getting better, Treasurer Josh Frydenberg said on Thursday after the ABS data was released.
"We take little comfort in the fairly modest move higher in today's unemployment rate. The details of the April labour force survey paint a far more sobering picture," RBC Capital Markets strategist Su-Lin Ong said in a note.
"The degree of job shedding, likely tepid recovery in growth amid numerous headwinds, and ongoing uncertainty around COVID-19 and the exit strategy will likely keep the labour market weak well into 2021."
The Australian dollar initially rose immediately after the ABS data was released at 1130 AEST, but soon erased the gains.
At 1500 AEST, it was at 64.29 US cents, down from Wednesday's close of 64.79 US cents.
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