The unemployment rate increased 0.6 percentage points to 5.2% in October, however this isn't ringing alarm bells for economists.
ABS head of labour statistics Bjorn Jarvis said this was attributed to the participation rate picking up after lockdowns in NSW and Victoria ended.
"As we’ve seen throughout the pandemic, the changes in the labour markets with lockdowns continued to have a large influence on the national figures," Mr Jarvis said.
"There was early recovery in New South Wales, with their participation rate increasing by 0.8 percentage points in October.
"This was underpinned by increases in both employment - 22,000 - and unemployment - 35,000 - with their labour force increasing by around 57,000 people. However, it was still 218,000 people lower than in May."
"In contrast, while Victoria’s unemployment also increased, by 29,000 people, employment fell by a further 50,000, with their participation rate falling by 0.4 percentage points.
"The Victorian labour force was 113,000 people lower than in May."
As the pool of people participating and looking for work increases, so too does the unemployment rate - generally.
"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," Mr Jarvis said.
The 0.2 percentage point increase in the participation rate to 64.7% is the first increase since June 2021.
Monthly hours worked in jobs, however, fell by one million, though this was attributed to school holidays.
"Fewer people in New South Wales, Victoria and the Australian Capital Territory took leave during the school holidays – during the lockdown – particularly people who work full-time," Mr Jarvis said.
"This is something that we have seen throughout the pandemic, with some people working more hours than usual during holiday periods, in addition to the large numbers of people working less than usual."
Underemployment also increased in October by 0.3 percentage points to 9.5%.
It remains elevated in Victoria, up 1.3 percentage points to 11.3%, and NSW, up 0.4 points to 10.6%.
Indeed Asia-Pacific economist, Callam Pickering, said the results are "compromised" due to these states' ongoing lockdowns.
"The good news though is that the unemployment rate has recovered sharply every time a state has reopened from an extended lockdown. There is no reason to believe that it will be any different this time," Mr Pickering said.
"The unemployment rate remains relatively low but the measure is compromised across both New South Wales and Victoria due to the impact that lockdown has had on searching for and beginning a new job. This has had a large impact on labour force participation in both states."
"The unemployment rate in New South Wales is officially 5.4% but the actual rate is closer to 10% after you adjust for the impact on labour force participation. The same is true in Victoria, where the unemployment rate is officially 5.6% but the actual rate is almost 9%."
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