The easing of lockdowns in New South Wales was not enough to stop a rise in Australia’s national unemployment rate to 5.2%.

This was up from 4.6% only a month ago but still below the 7.0% rate recorded 12 months ago.

The Australian Bureau of Statistics (ABS) reported that employment rose by 22,000 in New South Wales and unemployment by 35,000 representing a 57,000 increase in the total labour force.


Why has the national unemployment rate rose despite more people being in work?

The national unemployment rate is the portion of the working age population who are not working but are actively seeking work – explaining why unemployment rose despite more people entering work.

Nonetheless, this was 218,000 less than in May before the Delta outbreak which sent Australia’s biggest city into a 107 day lockdown.

While most states did not spend a substantial portion of the last quarter in lockdown, 82,000 people across the nation became counted in the unemployment statistics by actively seeking work.

The ABS says this is the first time the labour force participation rate (the proportion of working age population that is either in work or actively seeking work) has increased since June 2021.

Bjorn Jarvis, head of labour statistics at the ABS, said it showed people were preparing to get back to work.

“This follows what we have seen towards the end of other major lockdowns, including the one in Victoria late last year,” he said.

“It may seem counterintuitive for unemployment to rise as conditions are about to improve. However, this shows how unusual lockdowns are, compared with other economic shocks, in how they limit being able to work and look for work.”

Bloomberg economist James McIntyre said there’s every change this trend could persist even with the continued re-opening of the economies that had been in lockdown.

“The lift in the unemployment rate could persist, if the recovery in participation outpaces the return in jobs,” he said.