Australia's jobless rate has reached 7.4 per cent, the highest level in more than two decades, but Prime Minister Scott Morrison concedes the real situation is worse.
Australian Bureau of Statistics data released on Thursday shows 69,300 jobs were lost in June as the official unemployment rate rose from 7.1 to 7.4 per cent.
Senior government figures put the effective rate at more like 13.3 per cent.
"The effective rate of unemployment is likely to be far higher than illustrated in these numbers and the treasurer and I and the employment minister, have not been shy about pointing to that fact," Mr Morrison told reporters in Canberra on Thursday.
The effective rate factors in people working zero hours and those who have dropped out of the workforce.
The ABS figures also show 210,800 jobs were added in June, while underemployment fell 1.4 percentage points to 11.7 per cent.
Mr Morrison said he expected next month's figures to show the impact of Melbourne's second lockdown.
But he talked up the total number of jobs rising as other states and territories opened up.
"I would say to Australians, as difficult as these times are, let's not look down, let's look up. Let's lift our heads," he said.
"Today's employment figures shows there is hope."
CommSec chief economist Craig James said it would be important for the virus to be contained so more workplaces can reopen.
"Understandably, the published unemployment rate may understate the 'true' rate but that is why JobKeeper was devised - to ensure people remain connected to their workplace," he said.
CommSec predicts the jobless rate will peak at about eight per cent.
Capital Economics senior economist Marcel Thieliant believes the peak may have already been reached.
"The rebound in employment in June should overwhelm further increases in the participation rate and we don't expect unemployment to rise any further," he said.
The latest unemployment data comes as the government prepares to reveal the future of JobKeeper wage subsidies and the boosted JobSeeker dole payment next Thursday.
Labor is arguing for JobKeeper to be tapered off gradually, while also better targeting the payment to the most-affected sectors.
Mr Morrison said income support would continue to be necessary beyond the initial six months of coronavirus support programs.
"It will be targeted and demand-driven and go to those most in need," he said.
Lockdowns in Melbourne have dragged consumer confidence back down, with the Westpac-Melbourne Institute survey showing June's gains being wiped out in July.
Consumer sentiment in Melbourne dropped more than 10 per cent, while elsewhere in the country it fell by 4.5 per cent.
Australian Associated Press