Almost 44,000 more people have lost their jobs in NSW as the state's unemployment rate rose by one point to 6.4 per cent in May.
It was a better result than NSW Treasurer Dominic Perrottet was expecting amid the COVID-19 pandemic, with the national unemployment rate reaching 7.1 per cent last month in figures released on Thursday.
He said behind the figures were people who were struggling, and the government wanted them back in work.
"To me, that's a better than expected result in the circumstances," Mr Perrottet told reporters in Sydney.
"When you look right across the board, this is just the start of the challenge that's in front of us.
"NSW particularly ... is more exposed than other states, but I think we've also been incredibly successful in having the health issues under control which has now enabled us to open up as much of the economy as possible."
Premier Gladys Berejiklian said the government was expecting the NSW unemployment rate to reach at least eight per cent by the time the federal government's JobKeeper program is scaled back in late September.
"We are extremely concerned, and that's why every decision we take is about jobs," the premier said.