Statistics NZ reports unemployment fell to 5.1% in June quarter from revised 5.2% in March quarter; Under-utilisation rate, which includes unemployed and those who want more work, at 12.7%; 342,000 out of work or want more work

Statistics NZ reports unemployment fell to 5.1% in June quarter from revised 5.2% in March quarter; Under-utilisation rate, which includes unemployed and those who want more work, at 12.7%; 342,000 out of work or want more work

By Bernard Hickey

Statistics New Zealand has reported the unemployment rate fell only slightly in the June quarter as continued growth in the labour force from migration and an increased participation rate soaked up almost all of the 58,000 jobs growth in the quarter.

However, economists were cautious about the reported record-high 2.4% jobs growth in the quarter, saying changes in the survey included many self-employed as employed for the first time, making the June quarter survey difficult to compare with previous surveys. It also included 10,000 people living in armed forces residences who were included as part of the work force for the first time.

Unemployment fell 1,000 to 131,000 or 5.1% of the work force in the June quarter from a revised 5.2% in the March quarter. The unemployment result was broadly in line with economists' expectations, although the heavy revisions have made forecasting difficult. The participation rate rose to 69.7% from 68.8%. The labour force grew by 57,000 during the quarter after the strongest nominal population growth (97,300 or 2.1% of the population) during the year to June in New Zealand's history.

The New Zealand dollar initally spiked more than 40 basis points over 73 USc on the strong employment growth figure, but then retraced when it became clear the figures were affected by the new survey methods.

The Household Labour Force Survey's results were delayed from August 3 when the Quarterly Employment Survey and the Labour Cost Index were released after a significant revisions to the series to bring Statistics NZ standards for proving job seeking into line with international standards. See more detail on the changes here.

Statistics New Zealand said it had included a new under-utilisation measure for the first time. It said this measure provided an indication of the potential labour supply and included people who are employed, but want to work more hours (underemployed), those who want a job but are not currently actively looking or available to start work, and people who are unemployed by the official definition.

"A total of 342,000 people were underutilised in the June 2016 quarter, which equates to an underutilisation rate of 12.7. In future we will present this measure along with the unemployment measure as a way to better understand the untapped potential in the labour market,” Statistics NZ Labour and Income statistics manager Mark Gordon said.

'Be careful with the figures'

Infometrics Chief Forecaster Gareth Kiernan described the headline jobs growth figure as deceptively strong.

"Statistics NZ noted that changes to the survey’s questionnaire appear to be leading to better identification of people defined as self-employed – people who would previously have been counted as not in the labour force," Kiernan said.

ASB Chief Economist Nick Tuffley said comparisons with previous periods could not be made.

"Of the very strong Q2 employment growth relative to Q1, Stats NZ is unable to distinguish whether it is genuine employment strength or merely the impact of surveying changes," Tuffley said.

"As such, we cannot read into the Q2 results any implications about the strength of the economy or implications for the interest rate outlook.  It is best to treat the new HLFS survey as a structural break from the previous one," he said, adding it would take three more quarters for the data to settle down.

"The new HLFS survey now captures self-employed people better, pulling people into the labour force which were previously excluded, hence the moves higher in the size of the labour force and the labour participation rate. The survey now also includes armed service people in private residence (+10,000 alone). However, beyond the known armed forces impact, it is impossible to break out the drivers of the remaining 48,000 lift in employment between survey changes and underlying employment."

(Updated with more details, reaction, chart)


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Very skewed data collected yet they get to an outcome very close to previous. Number magicians at work.

You're right there S. If MSD's (Work and Income)Beneficiary Fact Sheets state these: 280,177 in receipt of a Benefit. 93,100 not consider unemployed JobSeekers. Real Unemployment latest figure; 11.5%+. You're considered employed with the minimum of 2 hours a week. This government is scrapping the bottom of the barrel to "spin" the good news?? and are out of ideas. Time for them to go.
More Spin from DildoMan 5.1%Phhh

No wonder the release of the stats was delayed. Needed more time to fiddle the numbers.


I along with many of my former workmates have been unemployed for near on 2 years after being made redundant.None of us are on the dole as our partners work and none of us are listed as unemployed.In my case I am just lucky that instead of wasting my income I put some away for a rainy day and boy it's been raining lately with insurance,rates and all the other price rises.

need to understand the underutilized figure more. does that include students?
it shows a high number of part time jobs, and I suspect most will be low pay so that will be a big chunk of the population requiring government assistance to make ends meet

Wouldnt it be revealing if the site published the total benefit 'spend' each month. That to include the full range of benefits and supplementaries, such as wff, sickness, unemployed, dpb, student allowance etc (Nat super showed seperately) ...the entire payouts. Comparable over time would be interesting.

Put benefit spend, superannuation and MP pay + benefits in a side by side comparison. Remember MPs are beneficiaries too.

Share trader,
This sounds like the same spin and manipulation the USA uses to skew their unemployment figures?
Is their no appetite within any of the different Parties to change the manner in which statistics and financial figures are gathered and recorded to allow some semblance of accuracy?
Naturally, nothing expected from National - they write the script!
However, we have been hearing for years how inaccurate the actual figures for GDP and CPI (think those are the indexes?) are right across the OECD.
What about the farce that LINZ used in separating a New Zealander from a Foreigner when alluding to who is buying the bulk of Auckland houses?
Did I hear Shamubeel Eaqub speak about the inaccuracy of the statistics and figures we are being fed?
The statistics and financial/economic figures either represent facts or they don't, and should we not demand a a transparent 'free from political fiddling' system?

5.1% in NZ, 4.9% in USA, pretty much the same.

Except in the USA, the number "Not in labor force" "16 years and over" is over 94 million people. In a country of 324 million, thats 29%. Thats a staggeringly large number of people.

You can make your stats look good by excluding all sorts of people. Hows that saying go, you can fool some of the people some of the time...

NZ's participation rate rose to 69.7%, therefore 30.3% are not participating "in the labor force"- similar to USA.

Along with the others, zero confidence that this is a true and correct representation. As for the "creation" of jobs, yeah, nah.......

The numbers may not be dodgy. I hold Stats NZ in higher regard than that.
It's immigration; Naturally if you import labour at a lower level of unemployment (by the criterion), the aggregate figure is going to tend downwards.

Surely National's slant is going to be job creation, economy good, and everyone richer.

Look at that 12.7% underemployment rate. Our economy is doing pretty badly with that sort of statistic (even if it is manipulated downwards).

Is it?
Based on what?
What should be the natural rate of underemployment?

You want people who want to do more work to not do more work? Perhaps look at why they want more work. Most will be struggling to make ends meet, basically working just to survive. Should 12.7% of the population be in this position.

Shouldn't the 5.1% unemployment be sufficient to stop consumption from going out of control? Does it need to be 17% of the working age population? Why is there so little work for these people?

The natural rate of underemployment shouldn't include those seeking work online, they should be in the unemployment category. Perhaps we have 11% actual unemployment the same as last time National were in power.

What's with all the questions?

The questions?
Well, we get a new metric and instantly someone states that it is appalling, with seemingly no point of reference...

Well it's still appalling but what concerns me is when things were going well we only dipped under 10% underemployment when things should have been going well.

That seeking work online is a strange one. Every job I have got since 2001 has been by looking online. I guess it depends on what industry you are in but door knocking, cold calling and buying a newspaper to look at the job ads is not how people get jobs in IT. There may be a bit more to it as it may count if you apply for a job online.

Also I you want an arbitrary number then the U-6 in the US when things were doing well was 7-8%, and after GFC was 18%+. We're at 12.7% with the dodgy statistic and the US is currently at 9%+. I'd say the underemployment rate is at least 5-6% too high for an economy to perform well.

It's lower than the OECD average and just over half that of Australia

Comparing your financial position with the Jones next door is not a good way to set goals or improve. There are many distortions compared with other countries. The US looks good in that statistic, however people are underemployed and earning significantly less than our minimum wage (they are working more for less money), they are substantially worse off. Australia looks worse off but a lot of people still earn more and have a better lifestyle if they move there.

Anyone who thinks New Zealand could be a better country is a doomsayer. There's no reason to accept adequate or mediocre performance from our economy. What ever happened to the "world beater" attitude? Has the population been reduced to people who think they are being economically productive when the market value of their house goes up?

It really depends on how it is calculated. I currently work 40 hours a week. I just got a $15/h pay rise. I would like to work more hours now. Should I be considered underemployed? If I got converted to a salary then I wouldn't want to work more hours so I would be fully employed. There will be a lot of people keen on overtime but it may not be available and in some cases it shouldn't be available. It is an interesting new statistic but without more data points, it doesn't mean a whole lot.

Pick your definition but it's either poorly utilised skilled workers, or part time workers with a loose approach.

So if you work full time as a courier but you are a certified accountant or other professional then you would be underemployed. The statistic has been used in the US for some time.

That would be a useful stat to have also. It will take some considerable time before the new stat becomes meaningful.

Once there's a bit more polish and they correctly categorise the numbers it will be more useful. When things started getting bad in the US the underemployment rate started creeping up, so it does give feedback on actual improvement, rather that just having an unemployment figure that has been fiddled for many years. When I was studying I was on "student dole" instead of actual dole which I'm sure excluded me from unemployment figures which were in the range of 9-11% at the time.

Manipulated data by changing the way it use to be done earlier. Anything from government agency is a question mark as long as national in power as are master in denial and manipulation. No trust.

Don’t like to break this to you doomsters, but the awful truth is this data is trending positively. Even after allowing for some change to previous comparative data points, NZ has jobs growth and stable unemployment at a time of record population growth. Focusing on selective data sub sets such as participation rates or making absurd allegations of Stats dept data manipulation may provide a temporary salve but regrettably the painful reality that this is a good news story, must sooner or later be faced.

But that won't play into the constant bashers that are on the site :)

One would expect that as the pool of unemployed gets smaller that wages would be heading northwards, but they aren't. That to me, suggests bodgied numbers, frankly.

even BE is saying high immigration is hampering wage inflation, so if we also have falling unemployment that would not add up.
Surely all these highly skilled immigrants would be forcing wages up as they need to be enticed here

its more likely the actual number (1800 difference) is not moving but due to the increase in population it is taking the percentage down

They are still increasing faster than the cpi. I would also suggest that the first jobs created by adding more people are service industry jobs which aren't highly paid. Once the immigrants get settled and find employment then companies benefit from the skilled workers and the money go round begins. I know of several skilled migrants which took some time to find suitable employment in their specialist area and the positions they filled were also hard to recruit for.

2.1% population growth isn't the highest for New Zealand. NZ had 2.5% population growth back in 1962, 2.0% in 1973 & 2.1% in 1974. Last time NZ population growth has been 2% was back in 2003 which is 13 years ago.

NZ population growth for most of the time between 1960-2013 has been near stagnant under 1%.

Nothing compared to the 3.4% population growth Australia had in 1971.

Tks for correction.
5% used to be regarded as a 'natural unemployment rate' floor. Be interesting to know if that is still thought to be the case and to what extent high inward migration changes thinking on this.
If AKL really is already below 5% and the building boom is only just getting underway, with CHCH still running quite hard, you wouldn't bet on population growth slowing any time soon.

so does this, in conjunction with the dairy uptick, mean we'll get a rise in interest rates

Amazing how not one of those new almost 70 thousand a year migrants has become unemployed eh!
Anyone believing this BS is a mug

Might mean they are willing to take on jobs that some kiwis won't.

Debt of stats is now the Goebbels of the NZ government departments, happy to lend a hand to a poorly performing government.
To classify someone only looking on the internet as not looking for work is nothing short of blatant deception, how else do people look for work now days?
Also how are people that are self employed all of a sudden counted as employed for the first time, what an absolute con job.
It seems the fiddling is very strong with this lot.
JK still had the cheek to say that it was the result of job growth, rather than what was clear to anyone with half a brain, which was that they used multiple changes to make it seem like more people were employed.

Comparing a NZ govt department with the grotesquely evil Goebbels and his propaganda ministry, is offensive and demonstrates a breathtaking lack of historical understanding.

MSD Beneficiary Fact Sheets: 280,177 in receipt of a Benefit. 93,100 not consider unemployed JobSeekers. Real Unemployment latest figure; 11.5%+.
More Spin from DildoMan 5.1%Phhh