• The April job cuts were the biggest monthly decline in history
  • The unemployment rate jumped to 6.2%
  • The youth unemployment rate climbed to 13.8%

Australia lost nearly 600,000 jobs in April – the biggest monthly decline in history – largely due to the impact of the coronavirus pandemic.

The Australian Bureau of Statistics said on Thursday that 594,300 jobs vanished in April, as the unemployment rate jumped to 6.2% -- the highest level since September 2015 -- from 5.2% in March.

The underemployment rate increased by 4.9 points to 13.7% while the underutilization rate increased by 5.9 points to 19.9%. The youth unemployment rate climbed to 13.8%.

The Bureau estimated that between March and April about 2.7 million people -- or one in every five persons employed in March -- either left their jobs or saw their hours cut.

"This is a tough day for Australia, a very tough day," said Prime Minister Scott Morrison. "Terribly shocking, although not unexpected."

However, the unemployment rate remained deceptively low due to a significant drop in the number of Australians looking for work. The Bureau said the labor participation rate fell by an unprecedented 2.4 points to 63.5%.

In addition, the government’s "Jobseeker" payment program which was designed to help businesses retain workers during the crisis also blurred the full impact of the pandemic. The million people on this unemployment benefits program are considered “employed” even if they’ve been laid off. Another 6 million are on the “jobkeeper” wage subsidy scheme.

Tom Kennedy, an economist at JP Morgan, said the true jobless figures are much higher.

"This owes, in part, to the government's JobKeeper and JobSeeker programs ... to limit labor-market damage and prevent widespread job shedding," he said.

Australia’s central bank, the Reserve Bank of Australia predicted last week the unemployment rate will soon reach 10%.

"We anticipate that those [jobless] figures will get worse," Morrison said. "That's why the programs we have put in place through the JobKeeper program, through the JobSeeker program ... [are] designed to ensure that Australians can get through this crisis and we can get to the other side."

Since March, Australia has imposed strict stay-at-home and social distancing orders and shut down thousands of non-essential businesses. The federal government seeks to lifts all social distancing restrictions by July, but individual states have the latitude to follow their own implementations.

Treasurer Josh Frydenberg said that loosening such restrictions would increase gross domestic product by $6.1 billion each month.

Morrison also warned that the government’s income support and wage subsidy programs will expire at some point. Otherwise, he noted, people would lack the incentive to seek work.

“That’s why these arrangements with the Covid supplement are temporary arrangements,” the prime minister said.

On a personal level, Morrison conceded the current crisis is worse than what Australia suffered during the 1991 recession, when he himself first entered the labor market.

“I remember it, I remember friends, I remember family who lost jobs, who couldn’t get jobs,” he said. “It was hard. This is harder. We haven’t seen this before. For many young people who have never experienced that, this is beyond anything they could imagine.”

Morrison further warned of even tougher times ahead.

“It’s one thing to close things down. It’s entirely another to open them up again and to do so in a Covid-safe way and that’s why we can’t get too far ahead of ourselves here,” Morrison said. “The task we have now is to reopen these businesses, to get employees back into their jobs and to do so in a Covid-safe way so that it’s sustainable, for many years potentially, if that is what is required.”

Anthony Albanese, the leader of the opposition Labor Party said the government must help the unemployed more.

“When we look at the Jobkeeper program, the government is still leaving people behind, particularly the most vulnerable,” Albanese said. “Our casual employees, people in whole sectors like the arts and entertainment sector, aren’t getting the support that they need, and the government needs to respond to this.”

Labor's employment spokesman Brendan O'Connor warned: “This [jobs report] is just the beginning of what is going to be increasingly frightening figures.”

BIS Oxford Economics chief economist Sarah Hunter also predicted unemployment will rise in May.

"But with restrictions being lifted and activity able to gradually begin recovering in all states [the June quarter] should be the trough before the recovery takes hold," Hunter added.