Treasurer Josh Frydenberg is optimistic the Australian economy has already turned the corner despite new figures showing the jobless rate unexpectedly spiking above five per cent in October.
The unemployment rate jumped to 5.2 per cent from 4.6 per cent in September, while the Australian Bureau of Statistics said a further 46,300 jobs were lost in October, making a total of over 330,000 in the past three months.
The survey period was September 26 to October 9 and did not capture the ending of COVID-19 restrictions in NSW and Victoria.
Mr Frydenberg says the latest jobs figures were collected when more than half the country was in lockdown.
"Since that data was taken more than a month ago the economy has turned the corner," Mr Frydenberg told reporters in Melbourne on Thursday.
"Importantly, the Reserve Bank is expecting unemployment to be below five per cent by year end and then to stay in the fours for some time."
The steep rise in the jobless came as the nation's powerhouse states prepared to emerge from coronavirus restrictions and people started looking for work again.
The participation rate of people in or seeking employment rose to 64.7 per cent in October compared with 64.5 per cent the previous month.
It was the first increase in the participation rate since June.
Employment Minister Stuart Robert said the figures continued to reflect the negative impact the COVID-19 pandemic and related lockdowns had on labour market activity.
"That said, the Australian labour market is set for a strong recovery, with payroll jobs already rebounding and job advertisements surging to a 13-year high," he said in a statement.
ABS head of labour statistics Bjorn Jarvis said the increase in unemployment showed people were preparing to get back to work, particularly in NSW, Victoria and the ACT.
"This follows what we have seen towards the end of other major lockdowns, including the one in Victoria late last year," he said.
Australian Chamber of Commerce and Industry said the growth in the participation rate is particularly promising given businesses of every size, across every industry, are facing increasingly severe labour and skills shortages.
"With vacancies climbing day by day, the sooner we can get workers back into employment the better," ACCI chief executive Andrew McKellar told AAP.
ANZ senior economist Catherine Birch said the unemployment rate could be a bit bumpy in the coming months, depending on the relative pace of the recoveries in employment and participation.
"But we expect to see a solid fall in unemployment to around four per cent by end-2022," she said.
Earlier in the day, Mr Frydenberg attended a virtual meeting of the finance ministers from the Five Eyes intelligence alliance - Australia, Canada, New Zealand, the UK and the US - hosted by US Treasury Secretary Janet Yellen.
"Today's meeting was an important opportunity to swap notes on how our nations are responding to COVID-19 and to secure our recovery from the greatest economic shock since the Great Depression," Mr Frydenberg said.
"Importantly, I was able to share how our economy is coming back strongly from the most recent Delta-induced lockdowns."
© AAP 2021