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.
131 Comments
"The reality of living beyond one's means at societal level is a bitter pill to swallow and will have many side effects indeed."
You know, interesting1234, you could post the same comment on just about every article - and many do. (And you'd sound just as vacuous.)
The positivity is more about participation rate than the unemployment rate I think. More people are actually available to work and yet the unemployment rate still isn't going up by as much as feared. Add in the fact that it is young people who are more likely to be unemployed and you actually have a markedly better picture than high frequency data was suggesting. (Not great for the young of course but they are a much smaller part of the economy)
This is the bigger concern and the impact is years away away. Social unrest, violence...you name it..
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.
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 !!!!
... no ... most central bankers got it 100 % wrong . They mistook the Covid response as a demand side downturn , when clearly it was a supply side shock ... therefore , economies didnt require juicing with historically low interest rates ...
And , we pay Orr $ 830 000 per year to be competent , to understand Finance 101 : clearly he isn't & doesn't , and he ought to have been sacked ... Luxon hasn't got the kahunas to right this wrong ...
Haha oh that’s some good Shane Warne level of spin the way you pivoted on that one RP…I’m sure yesterday it was that spruikers were sad because the property market would continue downwards with the higher than expected unemployment…now it’s the less than expected unemployment doing it with the OCR staying put…seems you had a dollar each way on that race…love it ❤️✊😂
Hey, either way, property is cooked, probably because the whole economy is cooked…the spruiker vs DGM war has no winner eh…but it is entertaining
Yip.
Anyone expecting rates to drop quickly is dreaming
We are now in a very complicated world. The economy is deliberately in recession, unemployment is deliberately up and we actually need house prices (and debt levels) to fall
So all is actually good.
The pain is arguably being felt by entities that can't survive at more 'normal' rates and sadly they may need to restructure or close.
We all know that Orr will try his hardest to hold out till November, and he may well succeed in doing that, but the economy will suffer, businesses will suffer, households will suffer. "So all is actually good" - sounds like you want it to be this way.
However, the banks will do their own thing, and you must have your head in the sand if you haven't noticed the 2 year mortgage rate drop from 7.29% down to 6.25%.
Regarding "we need house prices to fall", definitely true in Auckland, but elsewhere houses have become more affordable. But you will try to deny this, I'm sure.
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.
Need to add in all those on the sole parents benefit as well (76,000+ of them). Under Labour the requirement to look for work was removed, so technically they are not "unemployed" but people pumping out babies every 3 years so they dont have to get a job should be counted as delliberately unemployed.
The temptation for young couples to feign a separation and enjoy the extra trappings provided by the State must be strong.
There is also the rort of farming the 6 kids your have accidentally bred to family so they too can be on the solo benefit.
We encourage absent fathers and irresponsible breeding.
Haha yeah CB.
You guys have had a right party borrowing against the future earnings of your kids and grandkids....
Not to mention making their housing unaffordable and stuffing their environment.
Even funnier is that they have to work even hard still to pay your retirement coz your governments didn't bother to save, nor to keep infrastructure maintained for them.
Right on. Party on CB.
Ps if u do need some more spending money just put up the rent of a tenant.. lol.
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.
I find this a contradictory policy by MSD and here's why:
A young person can live at home with their parents, have mum or dad sign a letter saying they will be paying $_____ in rent/board and get the rent money they declared in said letter, and more on top of this as a 'jobseeker'. Whether they actually are paying their parents or not is immaterial and not verified after that point. Yet if one loses their job, has a partner or spouse that that they live with who earns over XXX amount then they won't pay? Albeit they consider level of savings the person has also, it seems there is a lot of opportunity for the youth, who are more likely to be unemployed, to play this system like a fiddle.
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)
Yes, it's properly random, they choose an address and that household becomes part of the survey, it's not voluntary or self selected in anyway.
Our household was part of the survey in late 2019 when we lived in Mt Roskill until we moved in Jan 2020.
Edit: Also, it's 15,000 Households, not people. That's going to be around 30,000 working age persons, thats well beyond the minimum sample size to be statistically relevant for simple stats like unemployment, underutilisation etc.
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!)
At what point does 'capitalism' become 'monopolistic / oligopolistic profit' gouging?
IMO - NZ Inc is so small that 'capitalism' basically is 'monopolistic / oligopolistic profit' gouging.
We are not 'Merica. 'Merica is competitive.
NZ is simply a cozy club of rich people preying on a voiceless, and shrinking, and despondent, 'middle class'.
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.
Unemployment 143,000 or 4.6%. Up 33,000 over the past year. Or up from 4.3% in the March quarter.
But this doesn't include the 196,434 on Job seeker Support. Up around 23,000 from June 2023.
Job seeker was 5.5% of working age population, and now 6.2%.
Our unemployment data is being distorted by the Job Seeker data not being included, and is realistically a lot worse than reported, with Job Seeker numbers also increasing.
Hopefully the RBNZ looks past the headline statistic!
"Our unemployment data is being distorted by the Job Seeker data not being included, and is realistically a lot worse than reported, with Job Seeker numbers also increasing.
Hopefully the RBNZ looks past the headline statistic!"
The original Facebook poster is a property accountant with property investor clients.
Many of their clients are likely to have high amounts of leverage outstanding and current interest rates are increasing cashflow debt payments, & increasing cashflow pressures.
The poster and their clients have a bias in wanting to have lower interest rates. The poster is speaking to the vested financial interests of their client base and audience. Remember, these property investors chose the level of debt that they took on - people are free to choose, however they are not free to choose the consequences of their choice.
To my knowledge, the official unemployment statistics have continued to be calculated consistently both in an economic boom and in a recession.
I didn’t make a prediction on unemployment, unlike you, because it would have been a total guess.
Since when did I say we were quickly going to have high levels of unemployment? That’s right, Jim, I didn’t. There’s a decent lag at play.
if you were actually reading properly you might also recall that I have said many times that the high levels of work visas will limit the extent of unemployment.
Again, a total misrepresentation of what I have said, and it gets annoying.
What I have said:
- consents have crashed
- there’s still been plenty of work in the mid to later stages of completion in 2024, but it’s falling away as projects are completed
- starts have crashed
- once many of the completions are finished, yes there will be big problems in terms of employment with the lack of starts
- unemployment will start showing up later in the year
- but the unemployment stats won’t be as bad as they might have been because of the significant number of construction workers on work visas who will return home. Plus a certain number of kiwis heading offshore
Is that now clear or do I need to repeat it again?
As someone that works very closely with the property sector and has seen a fair few feasibilities, it has crashed. Absolutely tanked.
Much of the current activity is still closing out old work.
It’s not specific to any build type either, you just struggle to make the numbers work. Many feasibilities are off by a mile.
It will take a couple more months for this to come through.
Expect the next unemployment levels to be much higher. Redundancies take time. Businesses have held on as long as they can. There is very little hiring going on at the moment. Ask anyone who’s been on the job hunt recently. Businesses won’t want to retain staff over the Christmas break and absorb all the stat holidays that come with this period. Next unemployment numbers will be 5.5% (I predicted 4.6% today, but only to a friend, I can’t provide the receipts unfortunately)
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