Coronavirus restrictions have cut a swathe through the Hunter labour market, wiping out 26,000 jobs in just two months.
Australian Bureau of Statistics data issued on Thursday show the Hunter unemployment rate increased from 5.5 per cent to 6.7 per cent from March to April.
The region's jobless rate would have been far higher if tens of thousands of workers had not quit the labour market.
The Hunter labour force shrank by a staggering 21,200 in two months, from 358,300 to 337,100. The number of people in work plummeted from 340,500 to 314,500 in the same period.
The labour force participation rate, the ratio of those in work or looking for work to all those eligible, fell more than four percentage points in Newcastle and Lake Macquarie, from 68.6 per cent to 64.2 per cent.
The unemployment rate jumped from 5.8 per cent to 7.7 per cent from March to April in Newcastle and Lake Macquarie and from 5 to 5.3 per cent in the rest of the region.
The government closed non-essential businesses on March 22, sending thousands of the newly unemployed to queue outside Centrelink offices.
The latest regional breakdown of the ABS's monthly labour force survey captures the extent of those job losses in the Hunter.
More than 18,000 people lost work in the region between March and April as the COVID-19 restrictions shuttered businesses in the retail, food, hospitality, tourism and arts sectors.
Hunter Research Foundation Centre economist Anthea Bill said the regional data could fluctuate because of the ABS sample size, but she said the Hunter figures were consistent with the national picture.
National figures issued last week showed 594,000 people had been thrown out of work in April and the unemployment rate was 6.2 per cent, a figure again kept relatively low due to a record shrinkage in the Australian labour market.
The NSW jobless rate rose from 4.8 to 6 per cent.
The secretary to the Australian Treasury, Steven Kennedy, told a Senate committee on Thursday that the true unemployment rate would be closer to 10 per cent once those who had left the jobs market returned.
Dr Kennedy said he expected the unemployment rate to climb during May and June and the labour market would take time to recover.
Dr Bill said many of the newly unemployed surveyed by the ABS had probably decided not to look for work because they had to look after children at home, because they were in "shock" at having lost their jobs and because new opportunities were scarce.
Hunter Business Chamber said the ABS figures painted a "grim picture" of the Hunter economy, but the real story was likely to be worse.
"As analysts pointed out last week, the April figures do not account for the impact of JobKeeper and the fact that many people who are receiving the wage subsidy are out of work but not actively seeking a job so have not registered as unemployed," chamber chief executive officer Bob Hawes said.
"Of major concern is the rise in youth unemployment, which now sits at 18.7 per cent in Newcastle and Lake Macquarie and 15.7 per cent in the Hunter Valley.
"The loss of jobs in the younger age groups confirms the impact of restrictions on accommodation and food services, arts and recreation, traditionally sectors that employ young people."
He said ABS data collected through the Single Touch Payroll system indicated the labour market might be near a turning point as the fall in wages and jobs was "flattening out".
The Newcastle Heraldreported in November that a surge in job creation had pushed the Hunter unemployment rate to 4.1 per cent, its lowest level since the end of the mining boom in 2013, and below the state figure of 4.3 per cent.
The Hunter had piled on 15,000 new jobs in the 12 months to November, 13,600 of them full-time, but Thursday's figures suggest those gains have been lost.
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