New figures show the economy added far more jobs than it lost in October as restrictions eased and the economic recovery continued.

But the unemployment rate climbed from 6.9 per cent to 7 per cent as more people re-entered the workforce.

The Australian Bureau of Statistics counted an extra 25,500 Australians as officially unemployed in October, taking the overall number to 960,900.

That’s nearly 240,000 more than October 2019.

But the ABS also reported on Thursday that almost 180,000 Australians regained employment in October (up 1.4 per cent) as restrictions eased and businesses looked to fill more positions.

“This strong increase means that employment in October was only 1.7 per cent below March, and reflects a large flow of people from outside the labour force back into employment,” said Bjorn Jarvis, head of Labour Statistics at the ABS.

“Encouragingly, the rise in employment was also accompanied by a strong rise in hours worked, particularly in Victoria, where hours increased by 5.6 per cent.”

BIS Oxford Economics chief economist Sarah Hunter said the easing of restrictions in Victoria had driven a better-than-expected rise in employment, with the state accounting for 81,600 new jobs created.

“Reassuringly, most other states also recorded solid gains, confirming that the recovery continues to gain traction as restrictions are eased and the health situation improves,” she wrote in a note.

Dr Hunter said the unemployment rate only increased because more people started actively looking for work – and were therefore counted in the ABS survey – as mutual obligation requirements for JobSeeker recipients had been reintroduced.

“The rebound in employment takes the total number of jobs back to just 1.7 per cent (226,100) below the pre-COVID peak reached in early March,” she said.

“Although the headline figure hides some of the ongoing losses in the labour market … the data clearly indicate that the positive health outcomes and fiscal and monetary support are all helping to propel a rebound in activity.”

The large rise in employment is welcome good news, but Indeed APAC economist Callam Pickering said the recovery to date has relied too heavily on part-time work.

“As we assess Australia’s economic recovery, we need to be mindful that Australia is generating insufficient full-time opportunities,” Mr Pickering wrote in a note.

He hopes October marks a reversal of this trend, with full-time employment over the month (up 97,000) increasing by more than part-time employment (up 81,800).

But he said “full-time hours worked are down 4.5 per cent compared with March this year, compared with a 0.4 per cent gap for part-time workers”.

The ABS jobs data comes after ANZ Research reported on Tuesday that consumer confidence had risen for the 11th straight week on the back of promising news on the vaccine front.

Yet separate data from the ABS has worryingly pointed to renewed job-shedding among smaller businesses.

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