New Zealand’s rate of unemployment nudged higher—to 3.6% from 3.4%—in the June quarter, while total employment increased 4% in the past year and has hit an all-time high of 69.8%.
The labour force participation rate, which measures the percentage of people over 15 who were either employed or actively seeking employment, rose to a new record high at 72.4%.
There are now more than three million people in the labour force, with 2.9m currently employed. These numbers a year ago were at 2.9m and 2.8m, respectively.
Statistics NZ defines an unemployed person as someone who has no paid job, is working age, is available for work, and has looked for work in the past four weeks.
A broader statistic is the underutilisation rate, which adds in part-time workers who would like more hours and people who aren’t available to work but are looking to start a job next month.
This underutilisation rate rose to 9.8% in June, up from 9.1% in the March 2023 quarter. Stats NZ said the largest increase came from part-timers who wanted more work.
The employment rate for women increased to 65.4%, the highest since the series began, while the rate for men rose to 74.4% – which was the highest since 1987.
Stats NZ said a quarter of all the employment growth during these three months was in tourism-related industries.
Jobs in the tourism sector returned to pre-Covid levels in June, with an 11% increase bringing the total number to 275,300.
Take-home pay
Wages, as measured by the labour cost index, were up 4.3% in the 12-months ended June, which was unchanged from the previous quarter.
This was marginally cooler than the Reserve Bank of NZ expected. It had projected a quarterly increase of 1.2% and an annual reading of 4.4% in its Monetary Policy Statement in May.
Stats NZ business prices manager Bryan Downes said annual wage costs have continued to increase at historically high rates.
A better measure of workers’ take-home pay is the unadjusted labour cost index, which increased 5.9% and average hourly earnings which rose 6.9%.
These wage increases would have been entirely consumed by higher household living costs, which rose 7.2% in the year ended June. A large chunk of this increase was due to the higher interest rates the RBNZ is using to tamp down inflation.
Stats NZ's quarterly household living-costs price indexes are different from the consumer price index—which was 6% in June—but better reflects the pressure on household budgets.
Wages were also supported by an increase in the minimum wage, which rose 7.1% to $22.70 per hour in April.
Downes said the largest contribution to the LCI in June came from the came from the retail trade and accomdation industry, which was up 1.5% on a quarterly basis.
“The rise in minimum wage was a core driver for the increase in wage growth in this industry over the quarter,” he said.
However, the increase in minimum wage made up only a small proportion of pay increases across all industries. More respondants cited the cost of living, matching market rates, and attracting staff.
Recessionary workers
New Zealand’s economy has slipped into recession, with activity falling in the past two quarters, but the decline has yet to translate into less jobs.
The labour market tends to lag the economic cycle, and employers have been filling long-standing vacancies as capacity appears in the workforce.
In a note published on Friday, Westpac economist Darren Gibbs said the number of online job vacancies has fallen 25% from a year earlier.
“That suggests that pent up demand for labour is either being met or withdrawn,” he said.
Some of the fresh capacity has come from migrants moving to New Zealand and straight into an economy hungry for their skills and services.
Statistics NZ reported the working age population increased by 0.7% in the June quarter and 0.8% in the March quarter — although much of this came from New Zealand workers.
Gibbs said the pressure on household finances from high inflation and rising mortgage interest rates may also be pushing more people to seek work and boosting total employment.
Some signs of weakening
But there are some signs that higher interest rates have begun to weaken the labour market.
Firms are becoming wary of the economic outlook and are planning to hire less staff. ANZ’s business outlook for July showed employment intentions at -1.6, albeit up from -3.5 in March.
And, the number of people on Jobseeker benefits has drifted up to 99,3000 in the June quarter (from 96,900) — although that figure is only loosely correlated with the actual unemployment rate.
ASB economists expect the unemployment rate will continue to climb above 5% in 2024 and ultimately peak at 5.5% in late 2025.
“This should temper wage increases and significantly dampen pressures on core inflation,” they wrote in a note published on Friday.
A projected loosening in the labour market forms the linchpin of the RBNZ’s forecast that CPI inflation will move back into the target range next year.
Once the Reserve Bank can be sure spare capacity in the labour market was cooling inflation, it would be able to cut the Official Cash Rate back towards the neutral rate at around 3%.
107 Comments
the economic decline has yet to translate into less jobs
In other words, we no longer have to be out of jobs in large numbers to struggle financially, we are achieving that while clocking fulltime hours at work. Good for the government to keep the plebes occupied in labour so they're not rioting on the street.
So much for the millions spend on catchy slogans during Covid ("Build Back Better"), we are now growing our workforce rapidly and working longer hours to produce less as an economy. Feeling prosperous, anyone?
We may be at an inflection point that existing infrastructure and supply chains in NZ are unable to take more population growth and this is putting more price pressure on goods and in turn pushing up wages for skilled workers in the workforce.
For example, it was reported yesterday that Queenstown and surrounding areas have grown much faster than anticipated and are going to need a major upgrade in electricity lines to increase transmission capacity (costing tens of millions) far sooner than planned and likely its own power source of ~100 MW within a decade.
We require thousands of electrical workers to enter our workforce by 2030 simply to replace retiring boomers before you factor in those leaving NZ. Such additional workload will only prop up wages further in the short run and force consumers to pay heaps more for infrastructure and basic services.
That'll be a contributing factor, but covid has attributed to:
- people close to retirement finishing early
- supply chains being screwed (or relocating)
- up to around a quarter of the labour force being absent on any given day
- companies realising more revenue often equals lower profitability
- general malaise and lack of enthusiasm
People and businesses will need to do a fair bit of starving for much of that to reverse.
Councils that don't invest in "vanity projects and schemes" will probably end up with higher rates bills as people won't want to live there. Take Hastings for example, they have done a good job of making the city look nice, there is a lot of cycling infrastructure, its actually a nice place these days. Had they just stuck to "core service" and left the place like it was 30 years ago I doubt they would be better off.
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I just found out that a NZ citizen in 50's was made redundant and a work visa holder in 30's selected for this position.
This was done by an Multi national company where they brought in a young guy 5 months ago on a work visa, then went through the redundancy consultations and made the NZ citizen redundant.
Is this even legal?
Yup, the role changed from a Senior position to a Junior position. Salary lowered accordingly. This is pretty much how immigration works. Bonus for the small business owners who get cash kickbacks under the table or into a foreign bank account in return for visa sponsorship.
Both Left and Right pursue an unfettered immigration policy. The only difference is that National brings them all in as temporary workers (to better exploit them) and Labour gives them all permanent residence (to be kind, and contribute to diversity). So like every other western nation stuck in the WEF universe where open borders are a condition of belonging, you don't get to stop immigration, merely pick which type you want.
The way you describe it sounds bad. But it may not have been deliberate. The rate of change in economic circumstances is unparalleled. The business may have genuinely needed both people earlier. Now, things are bad and the older person is probably better paid and may have different skills, which might mean the younger person is a better fit for the future. This is just the beginning and Christmas parties won’t be fun this year.
Pretty sure it is. When I was looking at new hires a few years ago I checked with INZ the legality of excluding Work Visa holders, and was told 'that is illegal - their visa gives them the RIGHT to work the same as a citizen". Your friend may feel hard-done-by, but who people make redundant is entirely a business decision (as other's have already noted).
It happens frequently, often to weed out the dead wood. The job descriptions and titles are changed just enough to make it seem like it's a new role, but the actual duties end up being the same.
For example Sales Engineer becomes Area Sales Manager. Internal Sales becomes Customer Services Representative etc.
Many employers have little or NO faith in this Labour government, if they get in, New Zealand will see the biggest BRAIN drain, the right people are going to leave, for better conditions overseas also they cannot stand whats happening to NZ with Labours crazy policies.
Fitch downgraded US Treasury bonds a few hours ago quoting "the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance".
That would also apply to us if Labour were to remain at the helm for another term.
Although Nat-ACT's crazy policies (tax cuts and more roads paid by cutting core services) won't be the reprieve many Kiwis seek. Obviously, there must be hidden plans to sell state-owned monopolies (Kiwirail, etc.) to foreigners in an attempt to pay down debt.
I have no faith in either of the major parties but there are some hell bent on selling remaining parts of New Mainland to Mainland - look at the infrastructure policy of private funding.
I may contemplate move to AU if their polices involves selling the country for infrastructure and propping up the Property Ponzi.
Believe me the real brain drain would begin once people realize they are much more out of the pocket because of private instead of state infrastructure.
Those geniuses don't understand that selling state asset and investments in infrastructure to foreigners in an attempt to reduce government debt is only going to worsen our current account position.
That's because investors expect higher returns on private investments than the relatively low yield on government bonds.
If the expectation is that more roads will increase our economic productivity and boost exports enough to offset those net increases in primary income outflows, then they are even stupider than I initially thought.
There are already good reasons to move to Australia, but privatising infrastructure isn't one of them. Try driving across Sydney where much of the road infrastructure is privately owned and you can easily pay $80 to go to the airport rrturn from Northern beaches are the North West. THey already have privatised hospitals as well,
As a well educated employee I am actively looking to move to Australia if National and Act form government.
Having grown up, and suffered first hand the debilitating nature of societal destruction wrought by National whenever they get in, life does improve under Labour.
Given my mid-30s age, I have no faith in National making any contribution to a NZ where I want to stay and work in. From their destruction of supporting families in 1991, to their wanton disregard for supporting young kiwis into the trades from 2008, Brownlee’s incredibly thick decision to not pay money to educate young kiwis in trade skills (plumbing, electrical and building) in Christchurch for the rebuild after 2011 and instead throwing money at employers to bring in filipinos and irish to do the rebuild (badly), and now wanting to sell off the rest of New Zealand to build more roads, yeah nah. National isn't good for New Zealand. It hasn’t been good for New Zealand for 40 years.
whereas Labour certainly makes an effort. With more young kiwis having been supported into trades training and apprenticeships, positive steps taken toward helping first home buyers who no longer have to compete with foreign buyers money laundering cash through real estate and putting a competitive effect on rents which are now actually kept in check by market forces, to investing in long term infrastructure (water) and generally trying their best, with mistakes, at getting NZ to a place where 40 years of damage can be remedied, at least they’re trying to retain an element of sovereignty.
Id rather Labour make mistakes as they try, rather than suffer a National government that has no long term vision beyond funnelling taxpayer money into private business hands, which will only see the cost of everything rise. At least when the state owns stuff, the money made by the state can at least be spent on other areas.
so yeah, I’m not wanting to hang around under National.
Certainly remember the food parcels coming from the church to our household as Mum was shoved onto an individual employment contract with a loss of penal rates after National annihilated the unions. Not long after, a “restructure” meant we then lived in a single parent household reliant on benefits and struggling to get by while raising 3 kids. So yeah, I remember the effects all too well. I was delivering the local newspaper at 6 years old to earn money to help pay the bills. So yeah, National is never good news for society.
Nationals destruction of the unionised workforce led to worse outcomes for those employed. Without the benefit of a union’s expertise, employees in the midst of a restructure had very little access to expertise elsewhere and were relegated to very little. At least FPAs were aiming to put a floor of conditions in employment, and astoundingly, allow for pay rates to be differentiated by regions. In the long term (something that National lacks acuity of) the minimum wage act would have done far less work. It means that workers in an area with a high cost of living like Auckland would be paid more, however, employers could balance that out by paying less in an area like Invercargill with a lower cost of living.
the short sighted ability of both employers and National/ACT to realise that FPAs would actually benefit them by not having to pay everyone, everywhere the same minimum wage is why New Zealand becomes a basket case as everyone is too busy thinking of the next reporting cycle instead of making far reaching legislation work for them. It’s utterly farcical that Kirk Hope doesn’t even recognise that FPAs are simply about establishing a minimum floor upon which IEAs and CEAs can be built on. His recent opinion piece that FPAs would remove the ability to offer salaried roles was so wrong and which showed his absolute dearth of knowledge, I had to wonder why anyone takes him seriously.
so again, National doesn’t do anything good for society. They claimed M Bovis was here to stay. It’s been eradicated. Farmers have been given more handouts by Labour in the last 6 years than by National in the last 40, and they claim Labour does nothing for them?
Farcical.
The effect of the Employment Contracts Act was to do away with awards and turned all agreements, collective or not, into individual agreements with extremely minimum terms. That meant penal rates and allowances disappeared overnight. Unions had to bargain again for new collectives, which was deliberately made near impossible. The unions were left annihilated as a result and stayed that way until the Employment Relations Act 2000.
Society requires a functioning employment market that allows workers to stay in their communities and build roots. The ECA removed that for many. The ERA was an improvement but it is FPAs that will again, at least, allow for minimum floors of entitlements according to the industry and sector they apply to. It means more of an ability for employers to craft minimum floors that are specific to their needs, instead of the blunt mallet that much existing employment legislation is where it applies to everyone, and as in the case of the Holidays Act, fiendishly difficult to apply for non-standard work arrangements.
Employers are simply creating a rod for their own backs by not recognising that FPAs would actually be useful for them given its allowance for incorporating regional differences in things like cost of living which ultimately average out for nationwide employers, but certainly benefits the Invercargill liquor baron who would only have to pay say, $24 per hour, whilst the Auckland liquor baron might have to pay $27 per hour. Allows for much greater refinement than the Min Wage Act does.
That meant penal rates and allowances disappeared overnight.
I worked for a few companies in the mid 90s and still got penal rates and allowances.
Your mum worked for a company that first removed penal rates, then had some redundancies. Sounds like the company wasn't on great financial ground. No political party could resolve that for them.
I've been working for the same company since the '90s, as far as I can tell all penal rates are exactly the same for anyone starting today, regardless of union membership.
For what it's worth I was a union member back then and had a part in initiating a 2 day nationwide company strike. Shortly thereafter I was told by the union my department (all shift workers) was paid well enough and our concerns didn't count. We left the union en masse and never looked back.
Plenty to be optimistic about on the prospect of another housing boom. More migrant workers sold a rosy picture of NZ and turned into rent/wage slaves.
Young Kiwis unable to put a roof over their families' heads, unless of course they are willing to drown themselves in long-term debt at high mortgage rates.
FYI I have no intention to see either a housing crash or boom - good luck though to you and the other non-DGMs looking to profiteer from food, shelter, etc.
A wealthy man visited a Zen master, impressed by his simple lifestyle and uncluttered living space. The rich man asked, "You are a great and wise man, why do you live so simply? Don't you know that you can have wealth and all the things that come with it?"
The Zen master, who was sitting by a window, pointed outside and said, "See that stone out there? I could make it into gold if I wanted to."
The wealthy man was surprised and asked, "Well, why don't you do it then?"
The Zen master replied, "Why should I? That would make me like you."
ahahaha.
Naa Yvil is a good fella that pretend to not be.
The story is more subtle than how it looks. The Zen master pointed out that different people want different things, sometimes opposite things. The wealthy man wants more wealth, and that makes it "him". The Zen master is only pointing out that he is not him, and he doesn't need to.
The parallel here is that property obsessed people assume that everybody want the same thing, for the same reasons.
Have a look at five year chart down around 15% the trend is down after RBNZ said it is holding rates, same with AUD. The inflation target is 2% so why will the OCR come down, basically it won’t until inflation is under control which will not happen when you are importing inflation with currency tanking. So many people refinancing million dollar mortgages with a 6% or more number the next leg down is just about to speed up
And now for something completely unrelated: https://www.oneroof.co.nz/news/44028
Some landlords are holding out until after the general election in October with the hope it might bring a change of government and get better, he said. One of National’s election promises is to reinstate tax deductibility on rental properties. “I’m not sure that will be the case or that it will be implemented as quickly either.”
Once again we see the OCR being used to force people to "re-enter" the employment market to ensure businesses have a supply of cheap and desperate labor on which to derive even more profits while keeping their costs low and profits high.
Does anyone else see a problem with the OCR being used in this way ..... Is there any wonder why NZ's productivity is so low? The government, the RBNZ and businesses use labor, rather than investment in productive capital assets, to keep the delusional "rich" in NZ rich.
Ho hum. Is it any wonder the smart leave for greener pastures?
I'm not sure what your angle is here. The OCR is being used to combat inflation. If you dislike monetary policy being used to this effect, then the other tool is to force more competition in key sectors like food, building etc. The government has declined to follow through on anything in these areas, despite a pretty clear mandate to do so from what I can see, and have left the central bank to sort it out.
And, the number of people on Jobseeker benefits has drifted up to 99,3000 in the June quarter (from 96,900) — although that figure is only loosely correlated with the actual unemployment rate.
That's because everyone goes on the Disability benefit or Single Parents benefit these days. That way they dont have to look for work.
And why wouldnt you go on the benefit - an unemployed person with a partner and two kids gets $63,000 a year in welfare benefits - that's more than HALF of all workers in NZ (median wage is $61,000 a year).
re ... "That's because everyone goes on the Disability benefit or Single Parents benefit these days. That way they dont have to look for work. "
Hilarious!
You clearly have NO IDEA how the system works nowadays.
The vast majority of the government's "social welfare" budget goes on Superannuation for people, no questions asked, over 65. Many of these people don't need it ... some don't deserve it ... and many don't even file tax returns to ensure their untaxed "entitlement" of it.
This is an article about the unemployed. Not the retired. Plus superannuitants arent the ones raising children who see going to school as optional, having a job as unnecessary, and crime as a pastime. There are far bigger societal reasons to make people work for a living rather than develop intergenerational welfare dependence.
A disability benefit needs a medical certificate from a medical specialist who can state with absolute certainty the person is completely unable to work in any job for more than 2 years. Next you will claim those in ICU, those without functioning organs or bedridden with cancer or disease are just lazy and they should be forced out onto fields to "work" to what for them is a likely early and often preventable death.
Whereas the largest benefit, greater than all benefits combined is non means tested and handed out like candy to mostly wealthy able bodied people who could get work but decide not to. But hey I hear a 65th birthday makes you extra special disabled, lazy and entitled these days.
Also of note the disability benefit is often less than half the 65 age group benefit entitlements, they can be denied the winter energy payment and denied the accommodation support and many disabled people are denied any income support at all (over half of those unable to work under 65). Try living with no income for a few years with a severe medical condition and essential medication & medical appointments being not subsidized and see how your survival rate changes.
Unemployment rates are very elastic. I.e. they move higher and lower far faster than most other indicators. (And worse - they're based on surveys! Not real pain from unemployed people needing jobs! Even more lag!)
I was expecting this small change in a couple of months from now.
This is going to get bad, real fast. (Expect even more ram raids.)
OCR cut still predicted for Feb/March 24.
RBNZ still over cooking it. Good god, they're knee-jerkists! They can't even predict high winds in a storm!
I think more Kiwis after they lose their jobs will simply just go to Oz where there is high demand and good wages for jobs right now. Losing your job in NZ will also give you time to actually look overseas, we all know that when someone is in a job working they don't have much time for looking or interviews.
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