Newcastle has recovered only 10,000 of the 25,000 jobs it lost last year, though job vacancies have hit a new record high.
Australian Bureau of Statistics figures issued on Thursday show Newcastle and Lake Macquarie unemployment at just 3.2 per cent, a result the bureau flagged as statistically unreliable.
The seemingly low jobless rate masks a worrying trend in the number of people in work across the city.
The total of employed people in Newcastle and Lake Macquarie jumped 7000 in May to 187,000 but remains well below pre-COVID levels.
In the first five months of this year, the number of employed persons in Newcastle averaged 184,000, up from 174,000 in the middle of last year but still down 15,000 on the first five months of 2019.
This erosion of Newcastle employment is in line with the ABS's 12-month moving average for the city's joblessrate, which stands at 7.2 per cent, 2.6 points higher than before COVID.
This figure is trending down, but youth unemployment in Newcastle and Lake Macquarie remains largely unchanged at 17 per cent.
The rest of the Hunter, outside Newcastle, has a trending jobless rate of 5.6 per cent over the past year and has shed far fewer jobs.
The number of people in work in the rest of the region averaged 136,000 in the first five months of 2019, fell to 128,000 during the worst of COVID then bounced back to 133,000 this year.
The NSW jobless rate was 5 per cent in May, down from 5.5 per cent in April, and the national rate dropped from 5.5 per cent to 5.1 per cent.
The number of people in work might have fallen 18,000 across the Hunter since 2019, but employers are crying out for skilled employees.
The National Skills Commission's Internet Vacancy Index for May shows a moving average of 5323 jobs advertised in the Hunter's three major employment websites.
The index was up almost 200 points on April, when it passed 5000 for the first time in its 11-year history, and 150 per cent higher than the June 2020 figure.
Business groups blame closed borders and a lack of investment in training for the high number of job advertisements.
The Hunter's overall labour force, a measure of those in work or actively looking for it, is 16,000 below pre-COVID levels. In some cases, the jobs are there but people are either not willing or not qualified to take them.
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