The official Australian unemployment rate hit 7.4% in June – the highest it has been since 1998

Australian unemployment is still rising during the COVID-19 crisis. (Education Images, Universal Images Group via Getty Images)
  • The number of out of work Australians is still rising higher, hitting 7.4% in June, according to the latest figures.
  • While the rate at which it is rising is slowing, it indicates the fallout from the coronavirus crisis is not yet over.
  • With real unemployment above 13%, there are more than 1.6 million Australians out of work.
  • Visit Business Insider Australia’s homepage for more stories.

While the JobKeeper program might be artificially suppressing the headline rate, it’s undeniable that Australian jobs are under immense pressure.

Australian unemployment rose again in June, jumping 0.3% higher to 7.4%, according to the latest ABS figures out on Thursday. While modest as a percentage, the increase still amounts to yet more job losses.

Again, it has been younger workers that have been hit particularly hard, as youth unemployment soars to 16.4%. Young males, in particular, have borne the brunt of that, with 17.1% out of work.

Naturally, employment figures right now are a little more complicated than that. A bouncing participation rate, the result of more people now looking for work, means both the number of employed and unemployed Australians rose.

So while 70,000 odd people lost their jobs, 210,000 gained one. Unemployment still rose, however, because more people are now actively looking for work.

“This is a result of the reintroduction of the requirement to look for work to be eligible for JobSeeker — though there are no financial penalties for not complying at this stage — on 9th June,” Sarah Hunter, chief economist at BIS Oxford Economics, said. “As this was partway through the survey period and financial penalties from not looking for work will come into force in the next few weeks, we expect to see a further increase in the rate in July.”

“The participation rate remains around 2% below its pre-COVID level, suggesting that there are still a large number of people that have lost their job and are not yet actively seeking work.”

It’s important then to note however that while there was a net gain in employed Australians, the uptick pales when compared to the bigger picture.

“Aussie employment rose 210,800 people in June – a record increase – but to put that into perspective 871,500 people lost their jobs in April and May,” Indeed economist Callam Pickering said in a tweet. “So this month’s gain was just one-quarter of the COVID-19 job losses.”

While the data is messy, Thursday’s rise puts the official unemployment rate now at its highest point it’s been since 1998.

However, if you want to go down the rabbit hole, things are actually quite a bit worse.

This week Treasurer Josh Frydenberg acknowledged this week that real unemployment — that is, Australians without jobs — is actually much higher at 13.3%.

Using this figure, there would be more than 1.6 million Australians and counting actually out of work at the moment, at the same times the job market continues to shrink.

It paints a far starker picture of the labour market. In part, the official figure been suppressed artificially by the JobKeeper which continues to keep out-of-work Australians on the payroll. What form it will continue in beyond its September mandate is to be revealed by the Treasurer during his 23 July budget update.

More significant, however, is the fact that it doesn’t include those Australians who have ‘left’ the workforce, having been made redundant without actively looking for a new job as the economy sours.

While it’s a positive sign the ABS figures aren’t growing by full percentage points anymore, there’s a lot to be done before those figures begin heading in the right direction.

With the economy not expected to recover entirely for years to come, plenty of hard days lay ahead for the average Australian worker.

More to come.