Unemployment up, as economy slows
The unemployment rate ticked up in the December quarter from 4 to 4.3 percent, according to numbers released by Statistics NZ today. This is the highest the unemployment rate has been since June 2018, when it was 4.4 percent.
It suggests the labour market is softening as the economy slows.
The data shows that while the labour force (people who are able to work) is increasing overall, the share of the labour force that cannot find work is increasing at a greater rate. The total labour force grew 12,000 in the quarter, while the total number of unemployed grew by 10,000. The total labour force now numbers 2,784,000, while the total number of unemployed is 120,000.
The figures showed a massive jump in the number of unemployed men, which grew by 8,000 to 4.4 percent, while the number of unemployed women grew by just 2,000 to 4.2 percent. Labour market and household statistics senior manager Jason Attwell said this was the first time since June 2010 that the unemployment rate was lower for women than men.
Statistics NZ urged caution with the figures. Attwell said that some high-level data had been adjusted “to improve its accuracy”.
“While this is not the first time we’ve made this type of adjustment, it is the first time we’ve done it before publishing. Previously we’ve made the adjustment a few quarters later,” he said.
Some of the adjustment came as a result of running the Survey of Working Life (SoWL) at the same time as the regular Household Labour Force Survey. The SoWL, which is run far less regularly, has historically resulted in fewer people claiming to be in the labour force to avoid participating in the survey.
The under-utilisation rate, which measures the number of people who are in work but would like to work more, also rose. It is now 12.1 percent, up from 11.4 percent in the previous quarter. Statistics NZ said this reflected mainly higher unemployment and underemployment.
The share of the labour force also fell, as the number of working-age people grew at a faster than those who considered themselves in the labour force. This saw the labour force participation rate fall to 70.9 percent. This rate is still historically high. The employment rate is 67.8 percent, representing only a slight fall from 68.2 percent in the September quarter.
While the data pointed to some gloomy trends, New Zealand still compared favourably with other OECD nations. It has the third highest employment rate, and the 14th highest unemployment rate in the bloc.
The data contained some rays of sunshine — although it must be said, not much. The Labour Cost Index, or LCI, which measures the cost of labour, managed to keep pace with the rising cost of living, but only just. It increased 1.9 percent in the year to December 2018, which is exactly the rate of inflation, measured by the Cost Prices Index, or CPI.
Attwell said the nurses’ pay settlement, which came into effect in August 2018, was a major driver of the increased LCI.
In recent years, the rising cost of living has outpaced increases in the cost of labour, leaving people feeling worse off.