PM tips jobless rate to increase

PRIME Minister Scott Morrison has warned employment figures will worsen, even as 600,000 jobs were confirmed lost in April as a result of the coronavirus pandemic.

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,” Mr Morrison said yesterday.

“It’s terribly shocking, although not unanticipated.”

While the jobless rate rise was smaller than economists had expected, Treasury has forecast the unemployment rate will rise to 10 per cent.

“We anticipate that those figures will get worse,” Mr Morrison said.

“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.”

Economists had been expecting an initial rise in the unemployment rate to be more than 8 per cent.

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 was likely the data understated 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,” Mr Kennedy said.

Mr Morrison said six million people were benefiting from the $130 billion JobKeeper program that allowed businesses to keep workers on their books through a fortnightly payment of $1500.

Treasury has estimated 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 jobs, comprising 220,500 full-time workers and 373,800 part-timers. The under-employment rate 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 employment spokesman Brendan O’Connor said.