One in five workers are either looking for a job or for more hours, while hundreds of thousands of Australians have given up looming for work altogether, revealing a complicated economic picture for the government to plot Australia's way out of the coronavirus pandemic.
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According to the Australian Bureau of Statistic's labour force figures for May, some 835,000 people have lost their jobs since March, with the unemployment rate growing to 7.1 per cent.
Of the 227,700 people who lost their job between April and May, just 85,700 were added to the number of those considered unemployed, showing more people who lost work were leaving the workforce.
The participation rate dropped to 62.9 per cent - the first time since January 2001 it is below 63 per cent.
Prime Minister Scott Morrison called the numbers "heartbreaking" but "not surprising in the circumstances".
Around 3 million workers are receiving the JobKeeper wage subsidy, a program which is due to end in September. There have been calls for the program to taper off instead of ending abruptly, but the government has said any announcements on the program's future will need to wait until a Treasury review is delivered.
The figures, which show young people and women have been harder hit than others in the workforce, will inform the government's decisions around JobKeeper and the double-rate of the JobSeeker unemployment payment, which is also set to end in September.
Mr Morrison didn't repeat previous commitments by the government to return to the previous $40 a day rate on Thursday, and said he wouldn't be rushed on decisions about what measures would continue past September and in what form.
"These are the questions which we are continuing to pull all the information together and to get the right balance of all of those decisions," Mr Morrison said.
"But what we have done is we have given ourselves the time to be able to do that."
Mr Morrison didn't repeat previous commitments by the government to return to the previous $40-a-day rate when he addressed the figures on Thursday.
He said he wouldn't be rushed on decisions about what measures would continue past September and in what form.
"These are the questions which we are continuing to pull all the information together and to get the right balance of all of those decisions," Mr Morrison said.
"But what we have done is we have given ourselves the time to be able to do that."
It is seen as increasingly unlikely the rate will return to its previous level.
While Mr Morrison said Australians needed to brace themselves for more bad news in the future, he said some comfort could be taken from these figures being taken before the economy started to reopen.
"We are working with some of the biggest economic challenges this country has ever faced," Mr Morrison said.
"And the government is working day and night to get the balance right, to get the right supports in place, the ones that will work, the one that will support, the ones that will encourage, the ones that will open business doors up again, the ones that will get Australians back into work."
Politicians, including the prime minister, and economists have agreed the headline unemployment rate doesn't tell the full story about Australia's jobs market.
"The fact is that if everybody who lost their jobs between March and May were looking for work, the unemployment rate, according to the ABS would be 11.3 per cent," Labor's employment spokesman Brendan O'Connor said.
Labour force expert at the University of Melbourne Jeff Borland said the May figures were likely reflecting jobs that were lost in April but not yet counted.
He said someone may have been considered employed but worked zero hours.
According to Professor Borland, the best way to show the health of the economy was the number of hours worked, a figure that had dropped 9.5 per cent in the month of April and then a further 0.7 per cent in May
"Because JobKeeper has muddied the interpretation of the unemployment rate, the best measure to understand how the market is tracking is the monthly hours measure," he said.
"We've never seen anything like this before," professor Borland said of the 10 per cent drop in hours worked across two months.
Recessions in the 1980s and 1990s only caused gradual drops that troughed around 6 per cent, he said.
Responding to the ACT's slightly improved unemployment rate, Chief Minister Andrew Barr said the data for the ACT showed "the first early signs of recovery".
"One month figures aren't enough to call it as the worst is over but it's looking more promising," he said.
"We're going to keep a very close eye on each new piece of data and adjust our policies to reflect the most recent information."