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PM Key says goal for 2013 is to reduce unemployment rate; Acknowledges NZers "cut us a fair bit of slack" due to headwinds
By Alex Tarrant
The government's number one goal for 2013 is to reduce New Zealand's unemployment rate, Prime Minister John Key says.
Unemployment hit 7.3% during the September quarter, its highest rate since 1999. When the figure was released in November, Key said he was surprised by it, as anecdotal evidence had pointed to jobs growth during the three months.
Speaking on TVOne's Breakfast programme on Monday morning, Key acknowledged New Zealanders had cut the government "a fair bit of slack" this year over the economy due to the headwinds it had faced.
But, "in the end, we've got to get on top of that unemployment number," Key said when asked about challenges in 2013.
Consumer confidence up, but pessimism about next year
Later on Monday morning, the Westpac-McDermott Miller Consumer Confidence Survey for the December quarter showed there were more consumers who were pessimistic about 2013 than there were optimists.
However, expectations for the economy over the coming year was only one component in the survey, which showed headline confidence up 8.6 points on the previous quarter, to 111.1.
The headline survey reading is a balance of optimistic/pessimistic responses to five questions: how households’ financial situation has changed over the past year; whether now is a good time to buy a major household item; households’ outlook for their financial situation over the coming year; and their near-term and longer-term outlook for the New Zealand economy as a whole.
Westpac said All the components of the survey improved in December from September:
• While households continue to describe their financial situation as poor on balance (a net 12% said their situation has deteriorated over the past year), they are a lot less gloomy than three months ago (when a net 22% said things had got worse). In fact, this is the least downbeat that households have been since December 2007, shortly before New Zealand went into recession.
• Looking ahead, households are now also cautiously optimistic for their financial situation, with a net 8% expecting things to get better over the coming year – up from 2% in September, and the highest since September last year (in the lead-up to the Rugby World Cup).
• When it comes to the wider economy, households continue to be pessimistic for the near term (a net 6% expect mainly bad times over the year ahead) and optimistic for the longer term (a net 37% expect mainly good times over the next five years). But on both counts this is again the most upbeat result we’ve seen since September last year.
• Given the sharp lift in overall sentiment the increase in households’ professed willingness to spend was relatively small – a net 29% said that it was a good time to buy a major household item, up from 27% last time. Even so, this is again the highest since September 2011 and, before that, mid- 2010.
• Reflecting the improvement in households’ personal and economic outlook, the Expected Conditions Index rose from 102.7 to 112.9, the highest since September last year. The Present Conditions Index didn’t rise quite so much in the quarter – from 102.3 to 108.5 – but overall is now the highest it’s been since December 2010 (when it was also 108.5) and, before that, December 2007.