The jobless rate is far greater than the 5.7 per cent recorded in March, an independent think-tank says.

March data released on Thursday showed the unemployment jumped from 5.2 per cent in February, the biggest monthly jump since July 1991 when Australia was last in recession.

But an analysis of recent Australian Bureau of Statistics data by the Australia Institute shows that in September 2008 there were 780,900 people who did not have a job and wanted to work, but were not included in the unemployment figures.

Taking account of these “hidden unemployed” brings Australia’s real rate of unemployment to 11.7 per cent, much higher than the official rate of 5.7 per cent, it says.

It says “hidden unemployment” refers to those aged 15 to 69 years that were not actively seeking work in the week the ABS was conducting its monthly survey, but were nonetheless looking for work.

These people tended to list their main activity as attending an educational institution, household duties and caring for children.

The institute says combining the official unemployment rate with the “hidden unemployment rate” gives a more accurate picture of the number of jobless in Australia.

“For every person officially recorded as unemployed there are some 1.2 people, the hidden unemployed, who would also like to work and are available to start,” senior research fellow at the institute, David Richardson said.

“With the global financial crisis causing further deterioration in the job market and a surge in welfare claimants forecast as a result, it is time for the government to address the inadequate benefits available to the unemployed.”

The Australia Institute recommends that unemployment benefits be increased by $56 a week for singles and $64 for couples in the May budget to bring the payments into line with age and disability pensions.