New Zealand’s unemployment rate rose 0.2 percentage points to 4.6% in the June quarter as employment failed to keep up with a growing work force, according to data released by Statistics NZ.
The working age population grew by 18,000 people during the quarter and an additional 2000 people chose to enter the workforce. This increased the total labour force by 20,000 people.
However, the number of people who were employed only increased by 12,000 and the remaining 8000 were classified as unemployed. The total number of jobless people was 143,000, or 4.6%.
Deb Brunning, the labour market manager at Stats NZ, said this was still the highest unemployment rate reported in the past three years.
“Recent rises in unemployment align with other economic indicators, including an increasing number of benefit recipients, a decreasing number of job vacancies, and declining GDP per capita,” she said.
Broader measures of the labour market also weakened. The underutilisation rate, which measures anyone who wants more work than they have, rose 0.6% to 11.8% which was also a three year high.
These numbers roughly matched the Reserve Bank forecasts published in May, but were slightly stronger than market consensus. Most economists expected unemployment to hit 4.7% and participation to decline.
Instead, labour force participation rose during the quarter while employment remained flat. This accented the increase in unemployment which is calculated as a fraction of the labour force.
This means the number of jobs in the economy did increase during June, just not enough to match the higher number of people looking for work. While headline unemployment matched most forecasts, the underlying job market was stronger than many economists expected.
Brunning said young people accounted for almost half the increase in unemployment and underutilisation that has occurred over the past year. Youth unemployment rates were over 20% for those aged 15 to 19, and at 8% for those between 20 and 24.
Pay bump
Wage growth, as measured by the labour cost index, rose 1.2% during the quarter which brought the annual change to 4.3%. This was driven by record growth in front-line public sector wages.
“The effects of pay increases for some health workers, along with school therapists and early-childhood education staff, have all come through in public sector wage growth this quarter, in addition to other settlements seen over the year,” Brunning said.
Economists and the Reserve Bank pay more attention to private sector wages, which grew just 0.9% during the quarter and were up 3.6% annually. This matched the Reserve Bank’s forecasts but was stronger than the market consensus.
In a note published prior to the data release, economists at BNZ said stronger than expected labour data could prompt some traders to back away from predicting imminent interest rate cuts.
55 Comments
The RBNZ are on a mission : we must destroy the economy in order to save it ...
... we must save it from inflation : Which was caused by Vladimir Putin ... nothing to do with the $NZ 50 billion we chucked into the finance system during Covid19 , nor the near 0 % OCR we created ...
Putin ! ... you bastard !!!!
Just one opinion, of course:
"... the slowdown doesn’t appear to be outside the bounds of what the Reserve Bank was looking for....there was little likelihood that the data would be bad enough to justify market expectations for rate cuts in August..." ANZ chief economist Sharon Zollner said. "We certainly agree that the Q2 labour market data will be important for the RBNZ’s calibrations, but if the details are close to our (and the RBNZ’s) expectations, we don’t think it’s a smoking gun for the imminent rates cut that the market is putting relatively high odds on."
The real unemployment figure has been way higher since they mucked around with the "Unemployment benefit" and called it the "Jobseeker benefit". There are so many rules where you basically cannot get it so the real figure is 2 or 3 times higher than the BS figure.
You're as bad as retired poopy,
Oh Lord - here's another one. Neither the MSD figures or the HLFS show employment numbers are falling of a cliff. I realize that the HLFS is the measure of choice. Why do you think MSD publish their figures in the first instance Pragmatist? For fun? - just to show the world they can count?😆🤣 MSD stats are another very useful measure that's published weekly.
No it is not. That is a misreading of the MSD benefit reports. If you want to use them to compare, the MSD JobSeeker support numbers were 196,400 as at June. The HLFS survey total labour force at June was 3,080,500. So that make the MSD jobless rate is 6.4%, and up from 6.1% in March. (And don't mix s.a. and actual data because that could give another distortion.) Don't forget not everyone on JobSeeker support is unemployed, by the same definition as used in the HLFS.
The numbers in recent weeks on the MSD website indicated a steady decline in those employed - it also indicated they're not exactly falling of a cliff - yet. With the employment mandate removed, is the latest release shock material enough to force the RBNZ to cut the OCR earlier than forecast? It's hardly a resounding yes now is it?
RBNZ considerations are multiple and are not just about falling house prices.
So many people do not qualify for the benefit, especially if your partner is working. Try walking into WINZ, chances are you will be declined. The number of people unemployed are those on the benefit, not the total number of people actually unemployed looking for work.
And the Kiwi rises - 0.5980.
That's should alleviate some Inflationary concerns....
We have a basic choice: Drop the OCR and see the Kiwi fall after it, and so CPI rises on the back of Import Price Rises; then a return to higher OCR to curb that figure, or leave well alone and let the market & banks do the work as retail competition for business of all kinds, heats up.
Healthcare and education are dominating the filled jobs and wage growth figures. Flow on effect from the collective bargaining agreements that came into effect last year, I guess. There's a definite wedge forming between the public and private sector statistics, although some of that will just be a timing effect.
I was fully expecting to agree with you on this, but thought I'd check the figures. To be honest I'm pretty surprised with what they showed:https://i.ibb.co/V9SwJh1/LCI.png
I'm surprised too. I was basing it on public sector averages, which were well behind private sector wage growth for the last few years - see the bottom graph on this page, adjust the time frame if you like:
https://www.publicservice.govt.nz/research-and-data/workforce-data-remu…
Really shows the impact of those big nurse and other healthcare worker pay equity deals. My own healthcare pay, no equity deal for my group, is up 17% from 2020 compared to the ~28% healthcare average you show, and 25% inflation over the same period.
My younger kid's ECE fee went up $50 a week starting July. He is under-3, so does not qualify for subsidy yet. The memo from the daycare said this is off the back of multiyear pay settlements agreed with ECE teaching unions.
Speaking on behalf of my domain, pay in engineering (the real kind, not IT haha) is still running hotter than inflation. Projects are still slow to get off the ground, but the pay increase is driven by employers desperately trying to stem the flow of talent to Australia.
...even the MSM is underwhelmed, not even a 'BREAKING NEWS' type banner headline to be seen.
Without the RBNZ having the Employment Mandate to consider anymore, and the fact that this is below their 4.7% forecast, tends to further reinforce the view they wont cut.
The logical move anyway would've been to see what the FED does in September and follow that for the stability of the NZD. All this reactionary noise from the Housing Ponzi vested interests should be ignored.
International flights, likely an impact there. Maybe agricultural as well. Other domestic emissions are under the cap and trade scheme, so those emissions are likely to happen one way or another. Unless the cap is lowered in response to falling carbon prices, I guess.
Looks like burning coal at Huntly might pick up our emissions slack there...
$ 830 000 per year Adrian Orr gets : easily the most incompetent guv'nor of the Reverse Bank we've endured .... why the Gnats didnt pay him off & cut the silly sod loose baffles me ....
... thank goodness for some clear headed thinkers in this nation , such as Prof MacCullouch ... what a crying shame that Chris Luxon is in the thrall of the useless Tugger Key , rather than getting into deep discussions with the likes of MacCullouch ...
$ 830 000 per year Adrian Orr gets : easily the most incompetent guv'nor of the Reverse Bank we've endured .... why the Gnats didnt pay him off & cut the silly sod loose baffles me ...
Jerome Powell earns approximately USD190,000 per year (approx NZD317k pa). He disclosed this publicly and stated that he believes his salary is fair. Powell mentioned that if his family's expenses exceed his salary, they would need to sell an asset to manage their finances.
We pay our bureaucrats well for a small island nation at the end of the world.
This means the number of jobs in the economy did increase during June, just not enough to match the higher number of people looking for work.
New Zealands unemployment rate is substantially a function of immigration visas granted now. Government has complete control, should unemployment rise, because they can just stop issuing visas for a year or two to reduce unemployment.
As such unemployment shouldn't be seen as an economic indicator because it doesn't indicate anything about the wider economy.
I'm suspicious of how accurate their unemployment estimates are - it seems to be based on a survey of 15,000 people:
https://www.stats.govt.nz/topics/employment-and-unemployment
https://www.stats.govt.nz/help-with-surveys/list-of-stats-nz-surveys/ab…
But regardless of how accurate it is, as long as the same method is used each time, then it's the trend that's important.
The biggest issue is the quality of the sample.
Do those 15,000 people truly reflect the pool of workers in NZ?
One wonders how many couch surfing (basically homeless) unemployed people get into the sample.
One also notes that older people who may want / need to work don't get into the sample either.
The survey population is the target population with the following exclusions. People:
residing in non-private dwellings (eg people in hotels, motels, hostels, military camps)
residing in non-permanent dwellings (eg people in tents or caravans not permanently sited)
And more to come:
https://www.rnz.co.nz/news/business/524398/paper-milling-company-oji-co…
https://www.rnz.co.nz/news/business/524323/major-energy-users-grapple-w…
The way the electricity wholesale market is structured and governed will wipe out what was remaining of our manufacturing base. (And this doesn't the 25% production reduction at Tiwai and the 60% reduction at Methanex forgiving almost 600M NZD export receipts which needs to be paid by everybody else who has an eletrical connection!)
Employment relates to everyone in the working-age population who did one of the following during the reference week:
worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment.
Worked without pay for one hour or more in work that contributed directly to the operation of a farm, business, or professional practice owned or operated by a relative (before April 1990 this was defined as 15 hours or more)
had a job but was not at work due to illness or injury, personal or family responsibilities, bad weather or mechanical breakdown, direct involvement in industrial dispute, leave, or holiday.
Unemployment relates to everyone in the working-age population who, during the reference week, were not employed, were available for work, and:
had actively sought work in the past four weeks ending with the reference week (only looking at job adverts is not counted as actively seeking) or
had a new job to start within four weeks.
Wouldn’t surprise me if the 0.1% miss vs expectations was basically the amount of people who were layed off and then immediately headed for Australia instead of staying in NZ on jobseeker benefits (basically half of Wellingtonians under 30 who lost their jobs seemingly)
The Achieved Sample Rate for June Quarter was 71%. So 29% of households targeted did not respond. The response rate for Auckland where private sector employment is greater tends to be lower than the rest of NZ.
So what is filling in the blanks? We are finding our way by gas light.
The achieved sample rate (ASR) measures how many eligible households responded to a survey, as a proportion of all dwellings sampled. In a typical quarter, the target ASR for the HLFS is 76 percent, which results in a final sample of 15,000 households and about 30,000 individuals across New Zealand.
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