NSW suffered the country's largest decrease in employment in April with more than 220,000 people losing their jobs as the coronavirus pandemic battered the economy.
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Nearly 600,000 additional people were out of work nationally, with Australia's unemployment rate jumping one percentage point to 6.2 per cent.
NSW recorded the largest decrease in employment with 221,400 people losing their jobs as the state unemployment rate rose 1.1 points to six per cent, the Australian Bureau of Statistics reported on Thursday.
NSW recorded the largest decrease in participation rate, declining 2.8 points to 62.6 per cent.
Monthly hours worked in all NSW jobs also fell by about 9.1 per cent and the state's underemployment rate rose 4.7 points to 13.2 per cent.
The ABS noted the national unemployment rate would have been 9.3 per cent if not for the federal JobKeeper program.
NSW Treasurer Dominic Perrottet described Thursday's figures as "sobering".
"These figures won't be the last bit of bad economic news but it does demonstrate the Commonwealth and NSW government's measures are making a difference," he said in a statement.
The treasurer said revenue was projected to drop by about $9 billion in the next financial year and the state was looking at an unemployment rate of up to 10 per cent down the track.
Mr Perrottet told a Committee for Sydney online event he intended to continue cutting taxes, and he suggested NSW's recovery would be led by infrastructure.
"I'm currently ... looking at ways in which we can bring forward shovel-ready, screwdriver-ready projects that we can gear up quickly to get as many people in work," the treasurer said.
He said the government hadn't yet made a decision regarding public sector wages, with unions and the opposition criticising any potential pay freeze.
Premier Gladys Berejiklian said most NSW workers who weren't government employees had either had their hours reduced, taken a pay cut or lost their jobs.
She stressed a wages decision had not yet been made but asked public sector employees to "know the context", noting the government had given up balancing the budget because of the COVID-19 pandemic.
Opposition Leader Jodi McKay called for the premier to reveal NSW's economic situation.
The next state budget has been delayed due to the coronavirus crisis.
"It's all of the citizens of NSW that should know, that want to know, that need to know, what is happening with the budget right now," Ms McKay told reporters.
Australian Associated Press