The number of filled jobs in New Zealand fell for the third consecutive month in June, according to data from Statistics NZ.
Stats NZ's Monthly Employment Indicators (MEI) release showed that on a seasonally adjusted basis the number of filled jobs fell in June by 1,766 jobs (0.1%) to 2.38 million filled jobs.
In addition, Stats NZ has also revised down figures for the two previous months. April, which was originally recorded as having a gain of 0.1% has now been revised down to a loss of 0.2%, while the May figures, originally stated as being 'flat' are now recorded as a 0.3% fall.
It's the first time since the Global Financial Crisis that this data series has recorded three consecutive months of falls on a seasonally adjusted basis.
These latest figures come shortly ahead of the release on August 7 of the official unemployment figures for the June quarter.
While the MEI figures are compiled in a very different way to the official unemployment data (which are part of Stats NZ's Household Labour Force Survey) the latest MEI data nevertheless does not bode well for those forthcoming unemployment figures..
On a seasonally adjusted basis there were 14,342 fewer jobs at the end of the June quarter compared with at the beginning while on a 'actual' basis there were some 29,639 fewer filled jobs, according to the latest MEI figures.
On a year-on-year basis filled jobs growth has slowed to just 0.2%, while a year ago the annual rate of growth was 3.5%.
Stats NZ broke down the changes in the seasonally adjusted filled jobs for the June 2024 month (compared with the May 2024 month) as:
- all industries – down 0.1% (1,766 jobs) to 2.38 million filled jobs
- primary industries – down 0.5% (538 jobs)
- goods-producing industries – up 0.2% (798 jobs)
- service industries – down % (2,388 jobs).
Comparing actual figures for June with June 2023, Stats NZ said by industry, the largest changes in the number of filled jobs compared with June 2023 were in:
- health care and social assistance – up 5.2% (14,047 jobs)
- administrative and support services – down 5.4% (5,887 jobs)
- public administration and safety – up 3.6% (5,738 jobs)
- retail trade – down 1.8% (3,996 jobs)
- professional, scientific, and technical services – down 2.0% (3,913 jobs).
By region, the largest changes in the number of filled jobs compared with June 2023 were in:
- Canterbury – up 0.8% (2,410 jobs)
- Wellington – down 0.5% (1,430 jobs)
- Auckland – up 0.1% (1,052 jobs)
- Bay of Plenty – up 0.6% (903 jobs)
- Otago – up 0.7% (811 jobs).
Westpac senior economist Michael Gordon said the jobs market in New Zealand "is now clearly softening".
"While the overall result wasn’t quite as weak as we were expecting, we’re aware that this series tends to be overstated on the first release. Indeed, the May result, which was initially reported as flat, has been revised to a 0.3% fall (and April – initially reported as 0.1% increase – was revised from -0.1% to -0.2%)," he said.
"The number of filled jobs is now up by just 0.2% on the same time last year. That’s happened at a time of still-strong population growth – even though net migration has passed its peak, the working-age population is still up around 3% on a year ago.
"The slowing pace of job creation is a recipe for a further rise in unemployment in the coming quarters," Gordon said.
The performance by industry has been mixed, although weakness is becoming more widespread, he said.
Construction sector jobs are continuing to gradually decline, as the pipeline of consented is work run down. There's also increasing evidence of declines in services sectors such as retail, hospitality, transport, professional and administrative services, and recreational activities.
"The MEI is drawn from income tax data, making it a comprehensive record of the number of people in work. While there are conceptual differences between this and the quarterly household survey, it has generally been a good predictor of the latter."
The Reserve Bank (RBNZ) has forecast that the unemployment figures to be released on August 7 will show a rise to 4.6% from 4.3% as of the March quarter. The RBNZ's forecasting that unemployment will peak at 5.1%, although a number of economists now see the figure ending up being rather higher than that.
9 Comments
NZ will become the case study in how not to handle an imported price shock. Lecture theatres full of macroeconomics students will be open-mouthed in shock as the tutor explains just how badly NZ handled the 2022 to 2024 period. I'd laugh about it, but we are talking about tens and tens of thousands of people being denied the work and wages they need to live any kind of life.
The villains in this case study will extend beyond Govt (Treasury) and RBNZ. The bank economists who were screaming for the righteous punishment of workers to 'tame inflation' should be mercilessly criticised. I mean, even now, as 1,000 kiwis join the dole queue per week (net), they are describing the jobs market as "clearly softening". Good grief - take a look at the data will you! It's late 2008 out there.
Following Jfoe's warning above on employment (His scary graph and comment, "It's late 2008 out there"), I also repeat a warning comment made recently ...
The trajectory of the recent June BNZ/Seek NZ Job Ads graph (https://www.interest.co.nz/business/128662/bnz-says-falling-job-ads-are…) follows almost exactly the crash in job ads shown for the earlier period 2009-2010. This culminated in an unemployment rate of 6.6% in June 2010.
Unfortunately I see nothing on the economic horizon to turn that trend around.
Remember we had aggressive Reserve Bank cuts early in the GFC.
It is worthwhile to recall it took 7 years for employment to climb out of that hole (4 years unemployment @ +6% and 3 years @ +5% 2010 - 2016)
Unemployment %
Jun-10 6.6
Jun-11 6.1
Jun-12 6.4
Jun-13 6.0
Jun-14 5.3
Jun-15 5.5
Jun-16 5.1
Jun-18 4.6
Jun-19 4.1
Source: Stats NZ graph of unemployment 2010 to current:
https://www.stats.govt.nz/information-releases/labour-market-statistics…
I agree, however one thing that might limit damage in terms of rising unemployment is the large number of recent migrants. Plenty of people on work visas in vulnerable sectors that will simply have to go home. Meanwhile the hundreds of thousands of migrants who got gifted PR by the ‘kind’ Jacinda Ardern might decide it’s better to return to their home countries than collect the dole here. While some right-wingers here seem to think getting the dole is a great gig, I would suggest it most certainly isn’t
Yes, I'm struggling to understand what the impact of this will be. I note though that thousands of migrants have taken below minimum wage jobs - opening food businesses, driving Ubers, doing care work (unpaid between visits). One thing for sure, it will be and interesting year or so.
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