The decline ended a run of three months of employment growth which reversed the bulk of the job losses stemming from the coronavirus crisis.

The number of employed Tasmanians reached a peak of 261,400 in February.

The total crashed by 21,900 to 239,500 by May, as movement restrictions and business shutdowns took effect.

The Australian Bureau of Statistics estimated employment recovered by 14,900 people by August in seasonally adjusted terms.

The September losses left total employment at 252,000, 9400 below the pre-pandemic peak.

The monthly 1 per cent decline in Tasmanian employment was one of the nation's worst, and nearly as bad as the 1.1 per cent decline in employment in lockdown-stricken Victoria.

Nationally, employment fell by 0.2 per cent - about 29,500 people - between August and September.

Tasmanian male employment decreased by 1400 between August and September and was down by 3800 since March.

Female employment dropped by 1100 for the month and by 5800 since February.

Full-time employment fell by 900 on a monthly basis and by 4800 since February.

The number of Tasmanians classified as unemployed shot up by 3500 during the month to 20,800.

That was the most since June 2013, as the state was continuing its long struggle to recover after the Global Financial Crisis.

The state unemployment rate increased from 6.4 per cent to 7.6 per cent, its highest level since March 2014.

Finance Minister Michael Ferguson said the state government was focused on job creation as the state recovered and rebuilt from the pandemic and its $3.1 billion construction blitz would play a key role, underpinning about 15,000 jobs.

"The Morrison Government's additional budget decision for $360 million investment in roads and bridges will support a further 2200 jobs in Tasmania," Mr Ferguson said.

"It is vital we keep infrastructure work going in Tasmania, which is why our measures to reduce unnecessary red tape, through our Regulatory Reform Bill, debated in Parliament today, are also so important.

"ABS data for September shows 12,400 Tasmanians have returned to work since the height of the COVID-19 pandemic in May and we want to help any Tasmanian looking for employment to get work, including in the upcoming harvest season.

"Importantly, there are more Tasmanians employed now than this time last year, despite the pandemic.

"Today's Sensis Business Index for September confirms the majority of our businesses are confident about the future, which is the very basis for employment decisions.

"The government has always said it would not be easy, and we have a long road ahead to recover and rebuild a stronger Tasmania, but we will work hard every day to support businesses, investment and jobs in our state."

Labor said the latest figures showed Premier Peter Gutwein's recovery plan was failing.

"Peter Gutwein has repeatedly told Tasmanians they can be cautiously optimistic about the state's economic recovery under the Liberals, but the data paints a grim picture," Shadow Treasurer David O'Byrne said.

"Twenty thousand, eight hundred Tasmanians are now unemployed, with 2400 jobs lost in the past month alone.

"The state's unemployment rate has now jumped from 6.4 per cent to 7.6 per cent, which is particularly shocking considering even locked down Victoria recorded an unemployment rate of 6.7 per cent.

"Tasmania's youth unemployment rate is by far the worst in the country and underemployment continues to wreak havoc for Tasmanian households, with monthly hours worked down 2.2 per cent for the month, the biggest drop of any state or territory."

Mr O'Byrne said Labor celebrated every job that had returned since the peak of the pandemic and every business that had been able to survive.

"We need to be optimistic, but we also need to be realistic, and a government that is more focused on patting itself on the back than actually doing the hard work jeopardises our state's recovery," he said.

"Tasmania's COVID recovery continues to go backwards under the Liberals watch and the Premier can't continue to spin his way out of trouble.

"Peter Gutwein doesn't have a plan for recovery, making the upcoming state budget particularly critical in providing measures that give Tasmanians confidence in the future."

The ABS gathers the monthly employment data around the middle of each month.