Newcastle's unemployment rate rose to 7.6 per cent in January, significantly higher than the state and federal averages.
Latest figures from the Australian Bureau of Statistics show the jobless rate in the Newcastle and Lake Macquarie local government areas jumped from 7.0 per cent in December.
The unemployment rate in NSW was down 0.3 percentage points to 6.0 per cent. The national figure dropped 0.2 percentage points to 6.4.
In contrast, the number of people in work fell by 3800 in Newcastle in January and the number classed as unemployed rose by 1000.
The city's workforce participation rate, a measure of how many people are either in jobs or looking for them, fell again, from 64.2 per cent to 63.3, well below the national average of 66.1.
In the rest of the Hunter, total employment jumped 6100 and the unemployment rate dipped to 3.6 per cent, though the bureau flagged the latter figure as statistically unreliable.
Unemployment in Newcastle remains high as the jobless face a sharp cut in welfare benefits next month.
The Morrison government announced this week that it would permanently raise JobSeeker by $25 a week at the end of March, significantly less than charity and industry groups had sought.
The $75-a-week JobSeeker coronavirus supplement ends next month, leaving the unemployed $50 a week worse off overall.
The JobSeeker supplement provided $80.5 million in additional support in the Newcastle local government area from April to December.
Services Australia data quoted in a Newcastle council meeting this week showed that 10,481 people in the Newcastle LGA alone were receiving unemployment or youth allowance payments in December, a 50 per cent increase on pre-COVID levels and only 1400 fewer than the 11,924 receiving the payments at the peak of lockdowns in May.
Research from the Bankwest Curtin Economics Centre issued on Thursday showed single people on JobSeeker payments would be left $166 a fortnight below the poverty line after March.
The researchers assessed the poverty line as being half the average income in comparable households.
For those in work, employers' JobKeeper supplements of $500 a week will also dry up in March.
The Newcastle Heraldreported last week that two-thirds of the 88,000 Hunter workers on JobKeeper in September were no longer receiving the supplement in December.
A background briefing from Treasurer Josh Frydenberg showed that about 1.54 million people were on the scheme in December, down from 3.6 million in September.
