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'Heartbreaking': Unemployment rate hits 19-year high

The unemployment rate hit 7.1 per cent in May. (Images: Getty)

Australia's unemployment rate has hit 7.1 per cent, which is the highest percentage seen since October 2001.

The Australian Bureau of Statistics on Thursday revealed the jobless numbers for May, which showed 227,700 people lost their positions last month.

This is the second largest monthly loss of jobs on record, way ahead of the third biggest of 65,400 in October 1982.

The largest loss in history was April this year, when 594,300 Australians had their employment terminated after the coronavirus shut down much of the economy.

The May unemployment rate of 7.1 per cent was a 0.7 percentage point jump from April.

Hours before the numbers were revealed, Prime Minister Scott Morrison braced listeners on 2GB radio for the realities of an economic downturn.

"We're in a recession and when you are in a recession, they are the sort of heartbreaking numbers we have to deal with," he said.

"And we still have a long way to go."

Morrison said after the release of the unemployment figures that it would take five years before Australia would economically return to where his government was leading it before the pandemic struck.

"It will take us, we estimate, around two years to get that back – just back to where we were before [the coronavirus] happens. We think over five years we can seek to catch where we were planning to be."

While April jobless figures showed a shocking number of Australians losing their jobs, the large number of people who didn't bother looking for a job or receiving JobKeeper meant the unemployment rate was kept down to a revised 6.4 per cent.

Shadow treasurer Jim Chalmers told AAP that the rate didn't truly reflect the grim reality of a recession.

"Australia's unemployment rate masks severe underemployment and the hundreds of thousands of people that have either dropped out of the labour force or are working zero hours."

There are some signs of a recovery, as coronavirus restrictions have been eased in all states.

Australian Taxation Office payroll data showed roughly 124,000 jobs were onboarded in May.

"It is good to see more and more businesses opening up now, the restrictions are coming off and I think people do get a sense we are on our way back," said Morrison.

The prime minister criticised the states for continued border restrictions, which the tourism sector claims are costing 5,000 jobs and $84 million to the national economy each week.

– With AAP

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