Australia lost the highest number of jobs ever recorded in April, as employers laid off hundreds of thousands of employees in response to the shutdown across the economy to reduce the spread of the coronavirus.
Thursday's employment data from the Australian Bureau of Statistics showed a decrease of 594,300 in April, the largest decrease to date.
The unemployment rate rose to 6.2%, the highest level since September 2015, from 5.2% in March but less than the 8.3% economists had expected in a Reuters poll.
The main reason why unemployment did not rise as much as expected was the significant decrease in the number of people looking for work which affected calculations. As a result, the participation rate fell 2.4% to 63.5% from April, the lowest level since 2004, and well below the expected 65.2%.
The data is the first official estimate of unemployment in Australia since coronavirus restrictions forced companies to close in late March.
These figures come as the Australian central bank predicts that the country's gross domestic product may contract by 10% in the first half of the year with unemployment reaching 10% by June and continuing to rise until 2021.
The Reserve Bank of Australia has taken a comprehensive approach, cutting interest rates to a record low of 0.25%, flooding the financial system with cash and even buying government bonds to cut corporate borrowing rates.
In addition, Prime Minister Scott Morrison pledged to spend more than 10% of GDP, including $130 billion, to enable employers to retain employees.
The data shows that underemployment, or the number of people who actually work but are desperate for longer hours, increased by 4.9% to 13.7%. Working hours decreased by 9.2% between March and April, which compounded the decrease in employment. The Australian Bureau of Statistics estimates that about 2.7 million people were affected by job losses or a reduction in working hours for economic reasons between March and April. This group is much larger than the number of people who had a job or worked overtime in the same period, between March and April.
Economists argue that the job market is not likely to improve quickly even though parts of the Australian economy have been reopened and the growth rate of new infections has slowed to about 0.1%.
