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Statistics New Zealand says the 37,000 rise in the number of unemployed to 151,000 is the largest quarterly rise on record; highest number out of work in eight years

Statistics New Zealand says the 37,000 rise in the number of unemployed to 151,000 is the largest quarterly rise on record; highest number out of work in eight years

Unemployment surged in the September quarter to 5.3% from the recorded level of 4% in the June quarter, which was the biggest quarterly rise ever.

The rise in seasonally adjusted unemployed numbers - of 37,000 - to 151,000 was also a record for a quarter. Women have borne much of the brunt of the increase.

The underutilisation rate – a broader measure of spare capacity in the labour market - lifted again, to 13.2% from 12% in the previous quarter and 10.4% in March.

The increase in unemployment, while considerable, is pretty much in line with what economists were forecasting. And the 5.3% figure is much less than earlier forecasts. In the May budget Treasury had actually forecast a rate of 9.8%.

The 4% figure for June - which was actually a fall compared with March - had appeared to seriously under represent the true unemployment situation. This was due to the difficulties of Statistics New Zealand measuring the rate at a time when people were locked down. It meant that those locked down who might have lost their jobs could not be seen as actively seeking work.

Stats NZ's labour market and household statistics senior manager Sean Broughton said the latest figures demonstrated the continuing economic effects of Covid-19, and its associated border and business closure.

“151,000 is the highest number of unemployed people we have seen in eight years,” he said.

“Last quarter’s low unemployment rate of 4.0% was explained in part by people’s inability to be ‘actively seeking’ and available for work during the national lockdown that was in place for much of the quarter. This quarter’s increase in unemployment reflects a return to more normal job-hunting behaviours.”

The seasonally adjusted number of employed people fell by 22,000 this quarter. This is the third largest quarterly fall seen in employment since the series began in 1986.

Women more affected

The number of employed women fell 14,000 to 1,266,000, while the number of employed men fell 8,000 to 1,444,000. The employment rate for women was 61.2% and 71.8% for men. These figures again showed that female jobs are being more affected by Covid than male jobs.

Stats NZ said that according to the unadjusted employment figures, there was a 44,700 person decrease in employment between the March and September 2020 quarters, 24,200 of whom were women.

"Of this unadjusted decrease in employed women, 19,700 came from tourism-characteristic industries, such as accommodation, passenger transport, travel agencies, sightseeing operators, and cafés and restaurants. While these are seasonal industries, the size of this fall is unusual and is likely related to additional Covid-19-19-related factors," Stats NZ said.

Stats NZ gave the following highlights for the September 2020 quarter:

  • There were 37,000 more unemployed people, an increase of 32.5% since the June 2020 quarter.
  • Applications for the eight-week Wage Subsidy Extension were open until 1 September 2020 and until 3 September 2020 for the two-week Resurgence Wage subsidy.
  • There were 22,000 fewer employed people this quarter than in the June 2020 quarter.
  • The underutilisation rate rose to 13.2%.
  • Hours worked nearly bounced back from record falls during lockdown.

This 37,000 rise is the largest quarterly rise in unemployment since the series began in 1986. The next largest rise in a single quarter was recorded in the June 2009 quarter during the global financial crisis, when the number of unemployed people rose by 18,000.

'More stimulus required'

Kiwibank economists said policymakers would view the latest unemployment report for what it is - "confirmation we're in a recession. More stimulus is required."

They highlight the fact that most of the job losses were women.

"Women are bearing the brunt of the burden, as there are more women in the hardest hit tourism industries. And what’s more worrying is the growing number of women leaving the workforce. The number of Maori women employed in tourism sectors fell a whopping 20% in the quarter."

The economists also noted the rise in underutilisation rate to 13.2% from 12% in the previous quarter and 10.4% in March.

"Slack is building in the labour market, and wages are softening. Wage growth eased to 1.6% from 2.4% at the start of the year. The outlook is soft, given the slack developing in the labour market."

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38 Comments

Considering some were saying COVID would cause it to get into double figures even by some estimates over 20%, this is a remarkable result.

23
up

Patience little one - all in good time.

When then even smaller one?

It seems to me that these jobs won't be coming back until covid goes away. I'm not sure that NZ has any exit strategy other than to wait it out. Considering that H1N1 is very much still around, we could be self isolated for a long time to come.

Not the worst thing for our long-term prosperity that tourism bounce back smaller and more value-focused after the threat of COVID passes. No world-class economy has a low-wage sector such as tourism at its core for good reason.
On international education, NZ would surely benefit from bringing more research students or STEM scholars instead of enrolling thousands of foreign students in low-level business and hospitality courses at private institutions each year.

I couldn't agree more, It baffles me how people seem to think tourism is the answer to our woes. We will never be at the top while we focus on rich people coming here to spend their excess income, we will only head down the road to becoming a lower wage economy. Sure it is harder to train our population to be more skilled, but in the long run it will pay off as opposed to having a nation of waiters and tour guides, or people selling useless trinkets to foriegners.

It baffles me how people seem to think higher home prices, higher borrowing, and adding more numbers and buzzwords to everything is the answer to our woes.

meh

15
up

..don't you get it yet? Covid sped things up, it did not cause this situation. Even if covid vaporized overnight we are not returning to bau.

What Covid doesn't do, rising minimum wage will finish off

New industries are not going to appear in NZ to pay high wages.
We are a tiny little country who's best industries are food production being milk and meat.
Without the tourists and foreign students the country has a problem in the long term.
Both mainstream parties will simply continue importing more and more people into the country to boost house prices. They have no other plan. This will be in conjunction with the RBNZ's plan of making borrowing almost free with zero interest rates and likely extended mortgages beyond 30 years.

This is at a fixed point in time. It won't capture anyone who lost a job and managed to find work during the same period, nor will it capture someone who has had their hours substantially reduced, or who are now effectively underemployed.

nor will it capture someone who has had their hours substantially reduced, or who are now effectively underemployed

That is captured as the labour market's underutilisation rate and has risen from 10.4% in Sep-19 to 13.2% in Sep-20. Not too bad I suppose.

Underutilisation is a broad measure of spare capacity in New Zealand’s labour market and is just as important as the unemployment rate, as it gives us a more detailed picture of the workforce.

This measure includes underemployed people – these are people who are employed part time (working fewer than 30 hours a week) and have both the desire and availability to increase the number of hours they work

I was legitimately expecting that to be far worse, so that's a good result tbh.

Stats NZ released its weekly employment indicators as of 2-Nov an hour ago.

Contrary to all the DGM comments on wage subsidies holding up paid job numbers till the end of Sept, it looks like our economy is still in bounce back mode. 17.7k jobs filled in the week.

There's no quick-fix to the underutilisation and poor job quality issues, and we can only rebuild our workforce out of this mess better infrastructure and training. For the time being, these signs of resurgent economic activity means the government could rake in the tax dollars to pay for necessary reforms.

https://www.stats.govt.nz/information-releases/employment-indicators-wee...

I agree. The $1.6 billion Trades and Apprenticeships Training Package is worth mentioning here.
Through these efforts, we are not only providing an alternative career to retrenched workers but also alleviating some of the productivity issues and skill shortages restricting our economic capacity in key growth industries.

https://www.scoop.co.nz/stories/BU2010/S00227/5600-new-apprentices-enter...
https://www.nzdoctor.co.nz/article/undoctored/ara-gets-record-enrolments...
https://www.scoop.co.nz/stories/PA2009/S00014/construction-and-agricultu...

With months wage subsidy, quantitative easing, recorded low OCR and LVR lifted, I would be surprised that if unemployment rate siting over 20%. 5% is still quite high considering all the measures has been taken. Now since wage subsidy ended, with other countries experiencing multiple lockdowns, I doubt this number will stay 5% in future. We'd be luck if it stays at 5%.

It is definitely a much better result than forecast but the show isn't over yet. We have at least another 12 months of these restrictions and headaches ahead, possibly longer. Lets not forget the Global economic storm that is brewing as well. There is a Tsunami of businesses going under in the majority of countries, not to mention commercial and residential landlords feeling a bit of pain as well.

CBL is the second largest mall owner in the US and is in liquidation.

According to the RBNZ stats, business and personal loans are cratering (currently negative growth) while home loan growth rates are going gangbusters, almost at all time highs. Very weird, in a bad way.

In conclusion; prices have to come down, the top has to wear the haircut, the creation and flow of "money" cannot be in the hands of private corporations nor through borrowing on homes.

Oh bugger. A whole bunch of beliefs and fears would have to be addressed for that to happen. "Values" would have to be questioned and I don't believe our mental health system would cope.

Sorry but no way is the actual unemployment rate this low. Try at least 15%. The numbers are fudged.

Work 1hr pw and you are employed.

.

Would this number be higher when Grant Robertson stops shaking the money tree.

DoThese figures don't take into account those that have been laid off but because of their hard work and savings ability don't get Govt assistance.

Yes

The unemployment rate is calculated from a survey Stats NZ do, using these criteria.

https://www.stats.govt.nz/topics/employment-and-unemployment

Eligibility for a jobseeker benefit and whether your counted as unemployed according to Stats NZ are two different things.

Still in soft landing zone, wait until they (the Govt) pull away that cushion pad.. they can't leave it there forever.

Kiwibank economists said policymakers would view the latest unemployment report for what it is - "confirmation we're in a recession. More stimulus is required."

RBNZ monetary "stimulus" has had little recorded impact on matters discussed here.

The only stimulus will be in the form of non-recourse aid paid by government transfer payments to those most in need.

I guess today's settlement of a new $4.0 bn 0.25% 15/05/28 government bond confirms as much.

More stimulus NOW!!! All recession indicators point straight at Adrian and Grant being too lazy. Printers are only working part time.

Ha judging by the property boom how much more stimulus do you want? Borrow and spend is what the Bank ordered.

More to come. Hearing redundancy stories daily.

The challenges faced within this term of government will likely be very different to the last term. When unemployment rates where very low a lot more focus went on peripheral issues like oil drilling and child welfare. A move towards higher unemployment rates might swing votes towards National if left unchecked.

It's clear signal for Mr.Orr & his amazing prudent team from weeks back? about the lower inflationary number.. they must lowered the current OCR further & quickly, if possible to negative double digit straight away to give a local OZ banks a jolt! (they've milking us for years, it's time to take it from their 'wealth savings' over the years).
This unemployment initial spook? also to be addressed with sudden/more/massive QEs/LSAP, I suggest to stunt the market by 300-500billions more, enlarge this Nov. FLPs amount - this will help govt to quickly spread the longer time for wage subsidy, remember we're a low wages by OECD comparisons, so a lot more room to wiggle here, this will ensure the steady stream of rental incomes & mortgages commitment back to the OZ banks - So? let's do this, do it now.. NZ can quashed this Covid19 bugs..then the same for economy. Let's keep moving to Lab govt & RBNZ - marching on, we're on the right track here.

Whoa! You are seriously Pusheen the nuke'em button there!

5.3% is not that bad compare to what was predicted BUT what about under employment as many who have lost jobs may be working less hours or under employed, so the unemployment data may not reflect true picture but will suit government propoganda.

Yeah the old "Better than expected" bunch of lies. People need to wake up and not believe everything they are fed in the media.

Thats fair, but at the same time, considering National were suggesting a 1920's style depression was imminent, it is better news.

I think there is still time to go, but considering how few jobs now are standing up on their own two feet without the subsidy, i think we'll get through this ok, certainly better than most of our main trading partners.