Australia enjoyed a massive jump in employment in October as COVID-19 restrictions eased, most notably in Victoria.

The number of people employed in the month grew by 178,800, exceeding economists’ expectations that centred on a 30,000 fall.

However, the jump in employment didn’t stop the jobless rate ticking up to seven per cent from 6.9 per cent as a result of more people returning to the labour market in search of work.

“Today’s job numbers confirm that Australia’s economic recovery is gaining momentum,” Treasurer Josh Frydenberg told reporters in Melbourne on Thursday.

“There is a light at the end of the tunnel.”

The treasurer’s home state of Victoria led the way in employment gains as stiff COVID-19 restrictions were eased, rising by over 81,000.

“I think Victorians will be absolutely delighted,” Employment Minister Michaelia Cash told reporters in Perth.

“Even with the step-down in JobKeeper, the easing of restrictions mean that jobs are coming back to the economy.”

The JobKeeper wage subsidy was cut to $1200 from $1500 per fortnight at the end of September and was reduced to $750 for those working less than 20 hours a week.

The participation rate of those in work or actively seeking employment rose to 65.8 per cent from 64.9 per cent, the highest level since March, when the coronavirus pandemic first struck Australian shores.

“That is Australians saying we are ready, willing and able to undertake work. They have confidence in the labour market,” Senator Cash said.

Full-time employment increased by 97,000 in October, while part-time employment rose by 81,800, the Australian Bureau of Statistics said.

However, Labor jumped on the rise in youth unemployment to 15.6 per cent in October from 14.5 per cent.

“Young people have been hit hard by the COVID pandemic,” opposition employment spokesman Brendan O’Connor said.

“They need more than just marketing slogans and short-term measures from the Morrison government.”

The ABS also noted that total employment is now only 1.7 per cent below where it stood in March.

But welfare group ACOSS said that still means there are more than 200,000 fewer jobs than before the recession.

“There is currently only one job vacancy available for every 12 people without paid work or enough paid work, with even fewer jobs in regional areas,” ACOSS CEO Cassandra Goldie said.

She said the JobSeeker coronavirus supplement was cut by $150 per week in September and will be slashed again in December to $75 per week.

“Coming into effect at Christmas time, this cut is a cruel and damaging mistake,” she said.

The unemployment rate remains shy of the 22-year high of 7.5 per cent recorded in July, but both Treasury and the Reserve Bank have forecast it rising to eight per cent before the end of the year.

But RBC Capital Markets head of strategy Su-Lin Ong said it is likely the labour market is recovering faster than anticipated.

“A further lift to confidence and encouraging vaccine news should also prove supportive,” Ms Ong said.

The Reserve Bank says getting more people in jobs is a national priority, and it won’t be happy until the jobless rate is closer to five per cent. It doesn’t expect that to happen until after 2022.