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Unemployment rate up to 6.5%; 150,000 unemployed (Update 4)
November 5th, 2009New Zealand’s unemployment rate rose to a seasonally adjusted 6.5% in the September quarter from 6% in June, figures released by Statistics New Zealand show. This is the highest unemployment rate in nine years, Stats NZ said. The 6.5% unemployment rate was at the top end of economist expectations. (Update 4 includes charts.)
ASB Chief Economist Nick Tuffley said the numbers were on the weak side of the Reserve Bank of New Zealand’s outlook for unemployment and that this would reinforce its view that it won’t have to raise the Official Cash Rate for some time yet. The Reserve Bank reiterated at the end of October that it expected the OCR to remain at 2.5% until the second half of 2010, despite markets pricing in a 25 basis point (0.25%) rate hike as early as January 2010.
Stats NZ said there were now 150,000 unemployed in the labour force, an increase of 9% from June and up 54% from the same time last year. This was the highest number of unemployed in 15 years, Stats NZ said.
The labour force participation rate fell to 68% from 68.4% in June, indicating some people have dropped out of the workforce altogether.
Figures show there were 122,100 ‘underemployed’ workers in the third quarter, from 114,300 in June and 82,000 a year ago. Underemployment is a measure of employed people who work part time but would prefer to work more hours and serves as a measure of underutilised labour in the economy.
Here are Stats NZ’s comments on the figures:
The September 2009 quarter Household Labour Force Survey (HLFS) showed further rises in unemployment and the unemployment rate, continuing the trend seen over the past seven quarters. The number of people unemployed reached its highest level in 15 years, while the unemployment rate hit a nine-year high. Employment continued to decline this quarter.
Unemployment increased by 12,000 (9.0 percent) during the September 2009 quarter, to reach 150,000, the highest level since the March 1994 quarter. This increase was largely driven by male unemployment, which rose by 9,000. During the quarter, the unemployment rate increased by 0.5 percentage points, to reach 6.5 percent – the highest level since the March 2000 quarter.
Employment fell by 17,000 (0.8 percent) during the September 2009 quarter and was driven by a decrease in male full-time employment. This decrease was partly offset by an increase in female employment during the quarter.
The labour force participation rate fell by 0.4 percentage points during the quarter, to 68.0 percent.
The total number of actual hours worked decreased by 0.7 percent during the quarter. The (unadjusted) working-age population continued to grow during the September 2009 quarter, partly due to positive net permanent and long-term migration.
Here is ASB economist Nick Tuffley’s take on the figures:
Implications: reinforcement of a gradual recovery
The RBNZ’s September Monetary Policy Statement incorporated a Q3 unemployment rate of 6.4% and an annual employment decline of -1.4% (which implies around a 0.4% quarterly decline). The RBNZ will undoubtedly see today’s numbers as on the weak side of its outlook, particularly if it tweaked its forecast to be marginally more positive in the lead-up to October’s OCR review. The HLFS outcome will reinforce the RBNZ’s view that it will not lift rates for some yet. We heavily discount the possibility of a January OCR hike that one commentator is forecasting. We also see March as too early given that key data come out in the month after that rate window. Our expectation remains that the RBNZ will start lifting interest rates in April.
Unemployment by age group:
Age group figures are not seasonally adjusted like the headline figure of 6.5%. The total unemployment rate from the age group data is 6.3% in the September quarter from 5.8% in June (see chart below).
The figures suggest those in the 20-24 year old age group are opting to not enter the labour force and look for work, instead choosing to enter or continue study or other training. The group’s labour force participation rate, along with the number of employed and unemployed all fell over the September quarter. University intakes are during the March quarter and at the beginning of the September quarter.
- The unemployment rate for the 15-19 year old age group rose to 25.1% in the third quarter from 22.9% in June. The age-group’s labour force participation rate fell for the third consecutive quarter, from 49.8% in June to 48.4% in September. Of the age-group’s labour force, the number of employed fell 5.7% to 116,500 while the number of unemployed rose 6.8% to 39,100.
- The unemployment rate for the 20-24 yr old age group fell to 10.9% from 11.5% in June. Its labour force participation rate fell from 73.6% to 71.6% in September. Of its labour force, the number of employed fell 1.3% to 193,200 while the number of unemployed fell 7.5% to 23,600.
- The unemployment rate for the 25-29 age group rose from 5.6% to 6.8% over the quarter. Its labour force participation rate fell from 80.9% to 80.7%. Of its labour force, the number of employed fell 0.9% to 210,200 while the number of unemployed rose 21.4% to 15,300.
- The unemployment rate for the 30-34 age group rose from 4.6% to 5.3%. Its participation rate remained at 81.9%. The number of employed fell 0.7% to 207,300 while the number of unemployed rose 13.9% to 11,500.
- The unemployment rate for the 35-39 age group rose from 4.1% to 4.4%, the same as in March. Its labour force participation rate rose from 82.5% to 84.1%. The number of employed rose 1.1% to 245,200 while the number of unemployed rose 6.7% to 11,200.
- The unemployment rate for the 40-44 age group rose from 3% to 4%. Its labour force participation rate fell from 85.8% to 85.3%. The number of employed fell 1.6% to 254,400 while the number of unemployed rose 32.5% to 10,600.
- The unemployment rate for the 45-49 age group fell from 3.7% to 3.5%. Its labour force participation rate fell from 87.4% to 86.4%. The number of employed fell 0.7% to 268,300 while the number of unemployed fell 5.8% to 9,700.
- The unemployment rate for the 50-54 age group rose from 3.4% to 4.2%. Its participation rate fell from 87.1% to 84.8%. The number of employed fell 2.8% to 230,800 while the number of unemployed rose 22% to 10,000.
- The unemployment rate for the 55-59 group rose from 3.4% to 3.8%. Its participation rate fell from 81% to 79.7%. The number of employed fell 1.6% to 189,300 while the number of unemployed rose 10.1% to 7,600.
- The unemployment rate for the 60-64 age group rose from 2.5% to 2.7%. Its participation rate rose from 67% to 68%. The number of employed rose 2.4% to 146,600 while the number of unemployed rose 8.1% to 4,000.
- The unemployment rate for those aged 65 and over rose from 1.3% to 2.2%. Its labour force participation rate rose slightly from 15.9% to 16%. The number of employed remained the same as in June at 81,800 while the number of unemployed rose 72.7% to 1,900.
Tags: statistics new zealand, Unemployment
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November 5th, 2009 at 10:58 am
hm…
If labour force participation rate fell to 68% from 68.4%, would that not make the effective unemployment rate a more accurate 6.9%?
November 5th, 2009 at 11:08 am
Some of us have just given up looking for work, ctnz, and so are not classified as unemployed any more.
November 5th, 2009 at 11:30 am
Smoke @ Mirrors really,
I’d put my money on 8% taking into account all the people who don’t qualify with spouses earning over the $535 threshold.
Funny really,” Tax take DOWN and EXSPENSES UP ”
Now that would make an interesting Graph !
November 5th, 2009 at 11:32 am
It looks like ‘underemployment’ is up ~50% on last year, male full time is down and female is up. guess my theory of recessions being a good time to pop out some sprogs is shot.
November 5th, 2009 at 11:39 am
they’re probably all busy right now filling in their unemployment time doing up the house that they bought at those super cheap mortgage rates??
November 5th, 2009 at 12:17 pm
I’m sure there is a Benefit somwehere, Rob, to help pay make the mortgage payments of the unemployed.
November 5th, 2009 at 12:30 pm
Still a fair way to go for the 20% unemployment, 20% interest rates, 30% house price drops that many bloggers have been predicting for the last couple of years. Might get there yet though, right?…..
November 5th, 2009 at 12:45 pm
Could a silver lining be a more educated/trained workforce down the road?
If the reduction in the labour force and unemployed in the 20-24 yr old age group does suggest that more are entering uni or skills training instead of the work force, this could be beneficial when the economy gets back on track and firms start employing again.
On the other hand it would mean more student debt is taken on that would have to be repaid.
Cheers
Alex
November 5th, 2009 at 1:00 pm
It seems that those spending other peoples money are still doing it.
Praise de lawd.
Heaven is a little couple of Islands off the coast of Paradise.
Hell is a little couple of Islands off the coast of Paradise.
Depends on your perspective I suppose.
Bob thinks the TAMAKI ESTUARY, is the smallest drain on the economy in Heaven.
In NZ the biggest drain is still a KEY point for discussion.
As long as the public keep borrowing the smart people can keep BENEFIT-ING.
It is the new game in town.
Religious Monopoly in GODS-ZONE.
November 5th, 2009 at 1:04 pm
Just wondering, why are there so many people out there that doesn’t like people who has bought their houses recently? and seem to find that they can’t afford the house after mortgage interest rates rises to 10%? It’s kinda annoying to keep on reading the same thing over and over again
November 5th, 2009 at 1:11 pm
There’s an easy answer to that one, Alwyn.
November 5th, 2009 at 1:13 pm
Alex , with all due respect. I’ve been an employer for 25 years and I believe there is absolutely no substitue for education, training and experience gained in the work place. That’s after our schooling system has dealt with them of course…………
If our unemployment rate was calculated on the same basis as the 1930s, where would it be? I understand the US rate would indicate a rate around 19 – 20% instead of the current reported 9.8% ish. Does anyone tell the truth anymore , do we know what it is?
November 5th, 2009 at 1:14 pm
Not that easy, Harriet, the voices MAKE me do it……
November 5th, 2009 at 2:11 pm
Harriet,
I was trying to be cynical and short… I managed to be at least one of those two
What I would really like to know, could Alex or Bernard put their mind to working out what the true unemployment figures would be if accounting for all sorts of hidden numbers (hidden by “official” & different classifications) and keep track of those? SO we could get an actual real picture of the world here in NZ.
November 5th, 2009 at 2:13 pm
Apologies, ctnz. I missed the cynical typeface!
November 5th, 2009 at 2:27 pm
Justathought Says:
“If our unemployment rate was calculated on the same basis as the 1930s, where would it be? I understand the US rate would indicate a rate around 19 – 20% instead of the current reported 9.8% ish. Does anyone tell the truth anymore , do we know what it is?”
Dead right…Governments for the last 20 yrs have been messing with who actually can be classified or even able to registar as unemployed..
Take a kid 19 living at home and parents earn over x amount
A spouse earns over x amount
What quailfies as part time…max of 30 hrs(?) at min wage…then places like mcdonalds sometimes rostter them for 2 hrs 1 week then 29.5 next week…
So what do these ppl do regist 1 week de regist the next?
yeah right…
Unemployments stats mean absolutly squat any more they cant even be used as an indicator anymore
Murray Says:
“Still a fair way to go for the 20% unemployment, 20% interest rates, 30% house price drops that many bloggers have been predicting for the last couple of years. Might get there yet though, right?…..”
Well IF you understand how housuing stats are compiled, and in a unstable market with the types of homes being sold and volumes, on the surface yeah u would be right…
Bt break everything down there has been a 18% to 22% drop in house prices
THEN go back and actually READ many of the doomsayers posts ….understand exactly all the detail of them and hows when why….
OH go do a few basic Stats papers at uni….
November 5th, 2009 at 2:43 pm
Steps – “go back and actually READ many of the doomsayers posts” – I’ve already read them, I’m just not convinced on the likelihood of some of them eventuating…..
November 5th, 2009 at 3:18 pm
Hi Alex,
You asked ” …. Could a silver lining be a more educated/trained workforce down the road? ”
I really have doubt. So what if we could have more educated/trained workforce down the road? The big problem is how to absorb them into the workforce if there are not enough “productive” jobs created in the months or years ahead? Even if there are enough jobs created, would the skills of the so called more educated/trained workforce be applied/matched? Just for example: would a business graduate end up be a counter cashier or sales assistant or what (not to mention that they might not even get a job)? And would an engineering graduate get an engineering related job after graduation? Some may not agree but then why trained them?
Job creations to absorb the more educated/trained workforce is going to be a main problem. Do you agree?
November 5th, 2009 at 3:25 pm
Harriet Says:
November 5th, 2009 at 12:17 pm
I’m sure there is a Benefit somwehere, Rob, to help pay make the mortgage payments of the unemployed.
There is, it is called the accommodation supplement. If you have a mortgage, you get extra money to pay the interest. Whether this is fair is debatable, but I guess it is better than the person being forced to sell their house. I can see the unemployment benefit becoming a ‘loan’ system in the future.
November 5th, 2009 at 3:56 pm
The Law of Unintended Consequences strikes again. In the guise of minimum wages for Youf. Notice the rate for these poor sods and soddesses (why does that look better with a double d? But I digress. ) at 25+%.
As they say, Nature bats last. Especially Human Nature….
November 5th, 2009 at 4:09 pm
Justathought and Trudy
I might have to agree that on the job training is better. But with more becoming unemployed, employers effectively have a wider range of candidates to choose from and if they are employing, they have the ability to choose older, more qualified workers in jobs that may traditionally be held by less qualified younger workers.
I think Trudy’s example of the business graduate being a cashier is what would be happening more now, and when unemployment hits 7%. You would rather employ a grad than just some kid with no training, as long as you can pay them the same.
With little job prospects, some may go to uni now who would be better off working in the trades, but if the trades are not hiring or there is a reduction in internships, we have to find something for them to do.
I guess the idea would be that in four year’s time (when the economy has hopefully recovered a bit) we’ll have a load of graduates that are able to walk into jobs instead of swimming across the ditch (expanding economy = more demand for jobs).
The talk after the latest trade deals, although perhaps focussed on ‘we may be able to export more milk to them’, has also focussed on NZ sharing its info and communications technology.
Cheers
Alex
November 5th, 2009 at 4:34 pm
Lovely to see that 93.50% of the work force are still employed,second lowest next to Australia ,and thats called the lucky country ,we must be the second lucky country,GO THE KIWIS and ABS this weekend.
November 5th, 2009 at 4:38 pm
I am wondering how the 6.5% unemployed compares to previous recessions when we consider the larger student and underemployed demographics.
I’m only guessing, but there must be twice as many students now as 20 years ago?? This would include many who I guess would rather be working but have gone to uni cause they cant get the job they want. During the “boom” times we had supposedly record employment, maybe this was largely due to the fringe being soaked up by tertiary institutions AND overseas travel and overseas relocation. I would suggest that the INCREASE in unemployment is a better relative measure in order to compare to previous recessions.
And underemployment is another big factor. At my work, cost cutting of 20% was undertaken. This included 2 laid off, and 8% reduction in pay for everyone else. Only the 2 get reported as unemployed, but the loss of wage earning is still 20%. This must be a big factor behind our budget deficits.
November 5th, 2009 at 5:09 pm
Hi Alex,
“…..The talk after the latest trade deals, although perhaps focussed on ‘we may be able to export more milk to them’, has also focussed on NZ sharing its info and communications technology.”
Would export of milk and dairy products be affected by the higher prices? When such commodity prices are bidded up, would the demand fall accordingly (based on basic economics demand & supply) not to even mention about the appreciation of Kiwi dollar in the last few months?
But, when currency movement is taken into account – then would the impact of the appreciation of our currency be neutralised and offset by the rise in commodity prices? Perhaps, that could happen if demand is a CONSTANT and demand is sustainable, do you agree?
November 5th, 2009 at 5:33 pm
Comparing unemployment figures of today with the 1930s is like comparing apples with oranges. In my opinion, comparing man-hours per household might be more meaningful. Then factor in the quality of man-hours, as humans are far less productive nowadays.
The big earners of the 21st century generally contribute little to society compared to, say, their 1950s counterparts, in the way of essentials and tangibles. Yet they draw excessive – even obscene – salaries for their fruitless efforts: money traders, insurance and mortgage brokers, elite sportsmen, and on and on it goes.
What a topsy turvy world we live in now, with values and concepts on success that border on the comical.
November 5th, 2009 at 6:18 pm
Alex, no chance of tertiary student numbers going up – indeed quite the opposite, student numbers are being forced down across the tertiary sector as the Government will no longer fund over-enrolments. These are HUGE funding changes and are going to have the most impact on new enrolments in 2010 – as the University’s can’t “kick out” the 2nd, 3rd and 4th year over-enrolments. My guess is 1st year enrolments will be around half the number seen in previous years, and it will be much, much harder as well to get accepted into post-grad programmes.
I’m absolutely surprised this hasn’t been reported on in mainstream media. All the Vice Chancellors are being ‘mum’ about making the massive problems they face public – in other words, they are all keeping their heads down and hoping their institutions will remain on the Govt’s “good” books as the preferred supplier of this or that faculty going forward. Expect to see a whole lotta consolidation over the next few years in that sector.
November 5th, 2009 at 6:29 pm
Did anyone see if this was covered on TV1 news? Just watched TV3 which had barely more than 15 seconds on this issue, before they moved onto a much longer segment on fireworks. Truly amazing !!
November 5th, 2009 at 6:33 pm
Yeah, TV1 just spent about 20 seconds on it.
November 5th, 2009 at 6:35 pm
Shouldn’t something like this be headline news? I don’t get it !?!?
November 5th, 2009 at 6:41 pm
Shouldn’t something like this be headline news? I don’t get it !?!?
Well, yeah, but such headline news might mean the public stops borrowing money. The media industry depends on continued consumer spending in excess of what we earn!
November 5th, 2009 at 7:59 pm
Matt S,
Seems yesterday’s property news received more coverage than this. Is that right? Perhaps, more property news to come in the next few days or next week and again may make headlines!
Does anyone know if the unemployment rates in the US is released on a monthly or quarterly basis? Maybe, we should have monthly unemployment data so that those businesses ie. retail, purchansing and ordering, manpower services etc…. can plan and project their business operations more effectively. Is that good?
November 5th, 2009 at 8:47 pm
Not surprised by this stat at all.
It will worsen in 2010. Must be at least 40,000 – 50,000 students graduating, I’d imagine not even half of those will get jobs in this market, unfortunately.
Anyone who thought a speedy recovery was coming was either dreaming or had a vested interest.
November 5th, 2009 at 9:49 pm
By adding up the number of students graduating this year and the number of jobs lost in this downturn, how many jobs would need to be created to absorb this crisis?
To think about it, is this scary and what if these fresh graduates couldn’t get into the real workforce? How many jobs need to be created to take this growing group?
Strangely, some still believe that the property prices are going up, sales are improving and confidence is coming back etc… would that be possible with high unemployment and people are losing their jobs? Where are we heading?
November 5th, 2009 at 10:03 pm
As far as I can recall, during the previous National led Government, BE said it’s unrealistic to have unemployment under 6%. Do we have to wait for next Labour Government to come under 6% again?
November 5th, 2009 at 10:27 pm
lets hope some of these people can gain employment in the lucky country. No point trying their luck in the other international cities of the world.
November 6th, 2009 at 8:01 am
I read an article on Stuff this morning about NZ wanting to lure back some of the Kiwis that flee to Australia for a better life:
…..”New Zealand also has the dubious honour of having the highest exodus of skilled people in the OECD”…..
Wow, I didn’t realise things were that bad. And then there was another article saying that we’re the overall 3rd choice of places that foreigers would prefer to immigrate to. Swings and roundabouts.
November 6th, 2009 at 9:30 am
Intended IMMIGRANTS and investors… bound for NZ from around the world….
READ THIS…..
It is in YOUR interest…..that is an in joke….ha ha….this below is NOT.
NZ STATISTICS….population 5 million…way less than half that in any GAIN-FULL employment I should warn you.
In Fact, 150,000 extra unemployed, just added to the 1.7million unemployable and in make work schemes, gangs, charities, public service, DPB, UNI’s. Parliament, ACC, LABTEST, IRD, health care, toll roads, farmers sub-sidence, electricity sub-sidence, infrastructure miss-management, prisons, TAB, LOTTO, bludgers from Fiji, UN, our own practiced bludgers….
The list is practically endless….and will never end….even if you come and invest here.
Another Laugh…
The others who think they are working are actually just real estate agents and car salesmen, taking what these people above have over-borrowed…and keep over borrowing…..so please bring on some NEW MONEY.
ABOUT 40 billion will do for now.
OUR banks and Politicians need your loot…so they can loot it.
Because also in addition all our POLITICIANS need a JOHN-KET..(JUNKET holiday in nz talk)…. overseas as is their right…(YEAH …..RIGHT).
Nearly half way folks unemployable 1.7 million….half working if that, half not…in NZ…..so we need a much bigger population….so bring yours as well as the money.
Because we have minor tax rorts like….WORKING for FAMILIES….so bring one of your own, we need workers.
The simple fact is if you come /invest here in NZ… expect to PAY, not get…
It is miniscule returns and fading fast……. so HURRY.
However, do not expect to be HAPPY…..it is working for half the population that I and you will eventually resent…to make THEM….happy..
Also do not expect a JOB here or a viable business…..we just want your MONEY or cheap LABOUR.
Cos get this…and you will laugh….cos we do like a sense of IRONY here…
We have to import people to do our seasonal manual jobs as the WELFARE STATE does not allow our IDLE to actually get out of bed each day to go get their share of the overseas investors money…………. (Go figure).
KEEP DIGGING investors………read the true stories about farmers.
How Fonterra keeps splurging…and Milking the very farmers they are supposed to be WORKING for.
PS…we will give you a rapidly sinking dollar to invest in, so you will be even poorer, no matter what INTEREST RATE they offer you in a BANK…. FINANCE CO…or other such rort.
PPS..they are AUSSIE BANKS mostly anyway…so try there you will get a bet-or rate to gamble with….and at least you get Aussie Dollars back….maybe.
PPS…Or alternatively if you really feel like a REAL ESTATE GAMBLE…
Invest in a SHON-key house…for CAPITAL GAIN…or even CAPITAL LOSS.
Don’t forget to offset it against your income….or is that an OXY-MORON….
Because we here in NZ are led by MORONS who think your investment should always be put in a LEAKY HOUSE.
Any further questions, just ask our PRIME-MUNSTER…..The KEY question is will he ACT and answer, or just SMILE…. benignly.
Actually …you can BANK on it.
BYE BYE….