Australian unemployment increases

Despite the rise in unemployment, Australia has avoided recession

Australia's unemployment rate hit a six-year high of 5.8% in June, up from 5.7% in May, but the increase was less than had been feared.

Analysts had expected the jobless rate to hit 5.9%. Figures showed the number of people in work fell by 21,400.

The government is continuing to spend a 42bn Australian dollar ($33bn; £20bn) stimulus package, which aims to support 90,000 jobs over the next two years.

So far this has enabled Australia to avoid slipping into recession.

The stimulus package includes cash rebates for most Australians, tax breaks for small firms, and building thousands of new houses and schools.

'Rocky road'

The number of Australians unemployed in June rose to 668,400.

Deputy Prime Minister Julia Gillard said the focus was "to keep Australians working".

"We still have a long and rocky road ahead of us as a result of the global recession," she said.

"Many employers are doing all they can during the difficult days of the global recession to hold onto their work force."

Despite the government's efforts, it has already warned that the unemployment rate could hit 8.5% by mid-2011.

The Australian economy grew by 0.4% in the first three months of 2009, following a contraction of 0.5% between October and December of last year.

An economy is generally considered to be in recession following two consecutive quarters of falling output.