THE Newcastle and Hunter unemployment rates climbed higher in June as job losses since the coronavirus pandemic began burst through the 40,000 mark.
Australian Bureau of Statistics figures issued on Thursday, July 23, show another 2700 people in Newcastle and Lake Macquarie lost employment last month, despite the reopening of the hospitality and tourism sectors.
A staggering 27,500 people have lost work in the city since February as coronavirus restrictions have crippled key parts of the city's economy.
The unemployment rate rose one percentage point in June and now sits at 11.1 per cent, the highest level since early 2003.
The ABS labour force survey estimates 21,500 Newcastle people were unemployed in June, a record since the bureau started reporting regional figures in 1998 and 1900 higher than the previous record mark set in May.
These numbers could climb further as JobKeeper payments fall, people return to the labour market and "zombie" businesses fail.
The labour force participation rate, the proportion of adults either working or looking for work, fell slightly in Newcastle in June and rose slightly in the rest of the Hunter.
The Newcastle participation rate is now 62.5 per cent, up on the 61.0 low point in April but still well below the February figure of 68.5 per cent and the 64 per cent national figure for June.
In the rest of the Hunter, the number of employed people fell 1000 in June, bringing the area's total job losses since June to 13,400.
The jobless rate jumped from 5.9 to 7.4 per cent.
Across the Hunter region, including Newcastle, the job losses stand at 40,800 since February.
Hunter Business Chamber said the figures, including a "disturbing" Newcastle youth jobless rate of 24.8 per cent, suggested unemployment in the region had not yet peaked.
"We had hoped that we had reached the bottom of the trough last month, so it is worrying to see unemployment continuing to worsen," chamber chief executive officer Bob Hawes said.
"It's a bit distressing that the figures have got a lot worse.
"Our real challenge now is to get ways to stimulate actual positions, see if we can help business to start advertising.
"Obviously, that's going to be very tough in this environment."
Treasurer Josh Frydenberg said on Thursday that the national unemployment rate would hit 9.25 per cent in the December quarter, up from 7.4 per cent in June.
He said the unemployment rate would be 5 per cent higher without the government's wage supplements and other interventions.
Mr Hawes said the Hunter youth unemployment rate was a "major concern" and highlighted the need to extend the JobTrainer package.
"Business sitting down and assessing the cost of taking on employees against the significant uncertainty about what their revenue is doing is a really tough ask," he said.
A Business NSW report this week showed JobKeeper was the "single most effective measure" helping businesses remain open and half of those receiving it might otherwise have closed down.
"There is no doubt we've still got businesses out there that are more likely to struggle or close. This term zombie businesses is certainly the case," Mr Hawes said.
New rules requiring businesses to show tax records to prove their eligibility for JobKeeper meant some would now miss out.
"That's still a big cliff. If they lose JobKeeper because of that ... one of the biggest costs to any business in labour," he said.