Figures from Stats NZ show unemployment is up slightly, but overall wage inflation has seen a sizeable boost

Figures from Stats NZ show unemployment is up slightly, but overall wage inflation has seen a sizeable boost

New Zealand’s unemployment rate has increased slightly to 4.5%, the first increase in the jobless number since December 2016.

The figure is 0.1% higher than the Reserve Bank and the major retail banks’ forecasts.

“The slight rise in the unemployment rate follows five consecutive falls, from 5.3% in the December 2016 quarter to last quarter’s 4.4%,” Labour Market and household statistics Senior Manager Jason Attewell says.

But he says it remains close to the nine-year low seen last quarter.

The Statistics New Zealand data also shows that wage inflation has risen by almost 2% in the year to June.

The minimum wage increase by the Government of 75 cents to $16.50 on 1 April 2018 was the main contributor to higher wage rates for the quarter, Attewell says.

“Seventeen percent of all surveyed salary and wages showed a rise this quarter," business prices delivery manager Sarah Johnson says.

"Around 3% of all wages were influenced at least partly by the minimum wage increase."

Another major factor was the Care and Support Workers (Pay Equity) Settlement Act 2017.

Capital Economist Chief Economist Paul Dales says with the unemployment data, as well as business confidence slumping and economic growth slowing, “the tide has probably turned.”

“Overall, the labour market remains fairly healthy, but with GDP growth slowing it does feel as though a turning point has been reached.”

Earlier this week, economists were expecting a soft unemployment rate figure from Stats’ numbers.

“The labour market has gradually tightened and is close to full employment,” ANZ Senior Economist Liz Kendall said.

Westpac were picking that number to rise to 4.7% by the first quarter of 2019.

Today’s figures will be a blow to the Government, which is aiming to reduce unemployment to below 4%.

Wednesday’s numbers also reveals the underutilisation rate – the number of people who work part time but want to work more – was up from 11.9% to 12%.

“Underutilisation includes a parent looking to start work in the next month once their child begins school, or someone who has just finished high school and wants a job but hasn’t started looking yet,” Mr Attewell says.

Weekly earnings

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It's just the beginning. Business confidence is low, this will keep increasing (unemployment) as manufactures delay plans to pay for plant/machiney. The business I run has slowed markedly after Q1.

True. There is also the problem with choke points appearing all over the economy at an increasing pace due to infrastructural deficits and skill shortages.
Businesses are unlikely to go ahead with expansion plans when they continue to scramble over limited resources and skills for their existing operations.


It will accelerate as the state sector ramps up public-sector wages rates, and the private sector gets squeezed.

Hiring decisions will become too hard, so the private sector will retract.

The state sector will be the primary instigator of wage inflation. This will continue unchecked for some time as industrial action is rolled out by the unions. Ultimately it will lead to lower productivity.

Oh that's convenient - just blame the public sector professionals for everything.

A lot of professional people I know have seen no wage growth since 2011-12 - should they just sit on their hands and watch their financial security go backwards? You know these people don't get bonuses, they don't get all get automatic CPI adjustments and you often can't get paid any more unless you enter a management role or switch between agencies for a few thousand extra.

If they don't put their hand out from time to time they get *nothing*. If the private sector can't keep up with that sort of feeble wage pressure then we have a serious productivity and value-add problem as a *country*, which is hardly the fault of all public servants.

no need to get hysterical larry76. my wife is in the public sector too. the statement above is economics 101, and is simply a reality check.

Average hourly earnings Q/Q came in at 0.2 percent against economists ( bank) expectations of 1.0 percent. That is a massive miss. With CPI running at 1.5 percent ,unless you were a minimum wage earner your going backwards.


they mentioned the care and support workers act - average about 23% increases - but no increase in productivity from those staff in fact the opposite as they are now guaranteed further increases - $1 an hour for most workers on July 1st this year -

As a provider of those services - and other health services - we have had to put a hold on recruitment and have swapped rosters and models as for $51K per annum - the new rate for qualified workers to provide home help vacuum, clean and make meals - we are better off getting young nurses and OT's who can do more faster - bottom line is that the increases in wages were not fully funded to employers -who have had to cut jobs as a result to stay afloat

Not to mention the Unions are behaving like big swinging dicks - which is also slowing job creation down in a big way!

kpnuts, I wonder if you could clarify what you mean by:

"for $51K per annum... the new rate for qualified workers to provide home help vacuum, clean and make meals.."

When you say "qualified" - what home care qualifications are you talking about?

And given the type of tasks you describe, why would nurses and occupational therapists be able to vacuum, clean and make meals any faster than these other home care workers?


This is what we must expect when the clowns take over the circus .

We need to get rid of this Government as soon as possible

I disagree. The COL supporters have been unequivocally defending Taxinda et al and this needs to run long enough to eliminate any revisionist wriggle room. In anticipation I’ve been noting the names and saving their posts in case they decide to edit them.

Rounding up the usual suspects eh? Good to see the fascist element of society thriving amongst the Hosking listeners and secret ACT/Dancing With the Stars fanclub. I'll be disappointed if I don't make your wee list.

A bit early to invoke Godwin. There are so many monikers and some post infrequently. My list is to ensure I know the innate bias of the person posting. To date I have seen few if any that swing both ways, albeit a few purport to. I suspect they are paid posters for their parties. Anyway, your leftie bias is noted. That metaphorical box you sit in has plenty of company from this site.


I think you’ll find that the Stasi was on the leftie side.

Btw you are naive in the extreme if you believe any party misses the opportunity to influence the public for free e.g. look at Taxinda’s use of FB on Sunday and the threads on Stuff, Trademe etc. what was that gang of international volunteers doing for Labour before the election? How many identifiable names do you see here?


Are you saying unemployment never went up under National?

We acknowledge it did as can be seen here ( HOWEVER, when unemployment goes up under a National Government its is a mere redirection of labour capital to more productive sectors of the economy. This is referred to as "good" unemployment.

Under a Labour/COL Government any increase is due to commie bastards stealing from hardworking Kiwis and giving our hard earned money to losers (aka employees), this is called "Evil" unemployment.

Get with the program Jimbo!

Unfortunately this sort of logic seems to prevail instead of dealing with problems realistically - a partisan approach prevails.

The timing of this suggests the causes more than likely lie with the National Government, not labour, or external influences.

Whatever ........... this Government has lurched , in just short of a year, from one self -inflicted crisis to the next.

C'mon Boatie, every Government lurches. some just do it better than others. Like National and housing....


Sorry Boatie National didn't lurch on housing, they did NOTHING!

Your blindness to accepting another Government shows your true nature. Democracy is for the thinking man. People stuck in and blinded by ideology do not deserve democracy. Looking at NZs political history i would suggest no political party should be allowed to run the Government for any more than three terms, preferably only two. In their final term they all tend to do to much damage due to their hubris, arrogance and blind ideology. Labour will and has proven be no different. I think they are to focused and cannot see the changing world for what it is.

Less than a year since the new government and unemployment is up, business confidence sharply down and GDP also on the way down... Not good


Unemployment rate increase probably related to Auckland house prices dropping IMO.
Auckland feeling like it is in recession, rest of NZ doing OK for now.
Doubt change of government is the cause, unless they have influenced house prices, in which case well done.

JimboJones take the blinkers off. Each metric in isolation in itself is not alarmist. Taken together it is a worry. If you seriously think Akl slowing down in a major way will not impact on the rest of the country you are foolish.


For sure it will impact the whole country.
I think our whole economy is built on house price growth. Once the warm fuzzies created by house prices going up disappears, NZers stop spending and start paying down on their debt binge.
This has very little to do with the new government.

Not quite right. The unemployment rate in Auckland is down to 4.2%, compared to 4.5% in both 2018Q1 and 2017Q2.


Yvil, is the Coalition to blame for falling business confidence in Australia too?:

Quote "“It is likely that the broadly-based decline in the housing cycle and on-going concern about household spending and weak wages growth have weighed on the outlook"

Business confidence, business conditions (trading/profitability/employment), forward orders all registering a decline. I also read that a contributing factor is a looming trade war. I'd suggest there are many NZ businesses equally as concerned.

Outside of the Coalitions legislated minimum wage increase, there is little wage growth for NZ workers to celebrate.


'Less than a year since the new government and unemployment is up, business confidence sharply down and GDP also on the way down... Not good'

.............................don't forget to add some spice, bake at 180 degrees for several months, making sure to throw in a few business failures, decreasing foreign investment and some comments about how rubbish things are from a former Prime Minister and voila - House price custard!

It's great :)

Would we change our ways if the smoke and mirrors remained in place?


In today's spruiker news:
- Auckland house prices down 0.1% - nothing to see here, winter blip, will stay flat
- Unemployment up 0.1% - worst government ever, Helen Clark's fault, bring back John Key

Loss of equity in my home doesn’t impact on my ability to feed, clothe and house my family. Loss of a job does. Luckily I was made redundant with a good payout sufficient to see me through. Others were not so lucky. Soon there may be a repeat of the job losses in the ‘90s. Taxinda et al can wear that responsibility based on their inept governance.

So can you see any scenario where job losses might impact on house prices?

Absolutely, at the margin in certain areas, which we are already seeing. Generally those seem to be lower socioeconomic areas where they are waged or short term contract employees. To date my area, Auckland - Inner East, is doing fine.

Until 20%+ of the market is removed

The economic slowdown we are seeing is the economy finally running out of road in terms of credit growth and immigration. Economic growth under national was largely basis on those 2 factors. That type of growth is fools gold. Labour now has to deal with the consequences of that, I hope they have the political courage to make some tough choices, but I seriously doubt they do. I also seriously doubt they have the gumption to understand that many of our current challenges have been caused by the credit bubble that national happily acquiesced in. That drug plainly will no longer work. I remain of the view that from labour’s perspective the last election would have been a good one to lose, national should have been left to clean up their own mess.

Hey, let's be realistic and appreciate John Key admitting NZ's nominal economic growth was based on high levels of immigration and cheap global credit though, as opposed to anything more substantial. While we're keeping a sharp eye out against revisionism.

Let’s be transparent and honest to the good people of New Zealand and tell them how many years of progress we are going to unravel under the COL.

No wonder the troughing public servants are striking now. They can see it all turning to feces shortly and want to lock in a favourable position. To glide on for another decade or so while we all ‘transition’. Given the lack of money on the leftie side of the political spectrum it’s going to be a long cold winter of discontent.

I'm sure people in the US felt the same way until it all unravelled in the GFC. You seem to be blaming the current government but perhaps you should start at you own doorstep and start looking at you own actions or inactions. Personal responsibility seems to be a trait lacking in people today - if the government changes the rules suck it up ladies - shit happens.

Ex Expat, first, for the sake of "transparency" can you define what you mean by "many years of progress"? The Coalition turned the autopilot off last September and now manage and actively steer the economy after years of infrastructure neglect.

Ex Expat,

You are one of a number who put up posts which go way beyond being critical of specific government policies and in so doing,demonstrate an inbuilt right-wing bias.
I have never believed that any one party has a monopoly on good ideas and I am disdainful of those whose world view prevents them from any critical thinking on politics and much else.
I would describe myself as a Social Democrat-a term well known and understood in Europe,but not here.This government,like all governments,Left and Right,will make mistakes,some serious,some less so. They handled the the oil and gas issue very badly and i don't like Peters,but I do support much of what they aim to do.
Take off your blinkers and try to see other people's point of view.

We need TTP here to reassure us that the unemployment rate change is just an 'oscillation' and that employment rates will be flat for the foreseeable future because the Auckland labour market is surprisingly robust.
That will set everyone at ease.

Maybe some recruitment consultants will be along soon to spin this :)

the unemployment increase could be due to credit-crunch than political

@Greg , what credit crunch ? The last time I checked we were still expanding credit growth , and the Banks seem happy to keep lending

Boatman, I think you are incorrect. The RBNZ talks about how household credit growth is slowing and that banks have tightened their lending criteria here;

Is it a good thing that it grows strongly in a stagnation/declining phase? I'd suggest from here it's more about borrowing to survive.

Its easy to blame the Government of the day for plummeting business confidence. I think it's more to do with difficulties many are having accessing credit. The farming sector is another area where many are hitting their borrowing limits.

nah, let's point fingers at people who have different politics

Probs just some real estate agents and professional landlords starting to turn up in the stats.

A blip so far. But taken with all the other negative indicators coming in over last month or two it's depressing.

Please Labour, drop the ideological agendas and focus on improving the economy, at least forget the industrial relations changes and slow up the minimum wage hikes to match inflation. With the world economy looking shaky we don't need you to be magnifying the trouble in NZ.

Had coffee with a chap.
His $300k budget just got handed back at $50k.

I hope you paid? What industry??

Good luck all. The Rockstar economy is not what’s its cracked up to be. Kiwis will start pouring into Aussie again, unemployment will increase further and house values particularly in the AKL ponzi will correct massively.

Happy we chose SYD once again.

You and Retired Poppy need to confer before posting. He reckons it’s happening in Australia as well. But on a more serious note, I’m not sure whether Aussie is a blessing or a curse as it allows people to find work but it also leaves the long term troughers in NZ and lower tax take to support them.

Sooooo.........first increase since 2016

Who was in power in 2016 during the last increase in unemployed????

That's right...the saviors - Teflon John and the National Party - shock horror!

Seriously some insanely emotive comments on here....anyone with any life experience has seen multiples of these cycles..and usually they have bugger all to do with NZ but wider Global sentiment

The irony of calling Sir John Key Teflon then deflecting COL responsibility is palpable. Tribal affiliation noted though. Thanks.

Nice assumption - I have ZERO political affiliation. And in fact voted for JK twice BUT if it looks like and smells like it...guess what it is?

Political tribalism is for the saddest of the sad... As for the current Govt - they are not doing much to win me over either but to think they are the root cause of this would require a very special sort of blind zealotry....

So again I ask, since many have rose tinted glasses....given there was an increase in 2016, during Nationals tenure, did that make that Govt hopeless as well?

Hyper partisanship seems to be the current prevailing political mood. Gone are the days of cooperation that existed after WW2 - where left and right could compromise to get good policy enacted. Instead today we have hyper partisanship - the rose tinted glasses you speak of. Gone are those who lived through WW2 and acted as a moderating influence. In some ways I fear for the future.

Yep - this whole ridiculous binary construct of LEFT or RIGHT is a nonsense... both major parties here cover so much identical ground its hilarious and obvious to anyone willing to open their eyes and ears.

What is completely terrifying is the complete lack of critical independent thinking in NZ and actually marking (any) Govt's performance against their own self imposed KPI's at the end of each term...

With an internet connection it is very simple to find the numbers and dig a little deeper to see the "truth"...

Sadly I don't hold much hope as we seem to be going down the same '(toxic and destructive) path as the USA...

I was totally in agreeance with your comment until the last sentence. It seems you too lack critical independent thinking.

Ok, what did you take from my comment about the USA to glean that?

I have multiple friends living there and visit 2-3 times a year and have down for 15 years. Are you seriously trying to tell me that is not a country divided on racial, social and political lines and that their politics isn’t toxic?

Interested in why you think this isn’t so?

I may have been assuming too much with your comment. Of course the MSM, the Democrats and even many career GOP people are highly toxic in the US, no doubt about that. When strong leadership and secure borders are not universally acknowledged as good then things are going haywire. Would you agree with that?

Problem is one person's "strong leadership" is another's dictatorship - how do you define strong leadership. I've quoted Edison before

Five percent of the people think;
ten percent of the people think they think;
and the other eighty-five percent would rather die than think.

You only think you are thinking as you dismiss the MSM yet still seem to rely on some other media - who says they are correct . All media is corrupted in some way.

Veritas is impossible to achieve - there will always be some bias.


'Agreeance comes from the Old French agréance and would therefore be expected to be used in areas with (former) French influence. It is also used in New Zealand. But it is commonly viewed as outdated and even wrong'

'Although present in English since the sixteenth century, agreeance is now often regarded as a nonstandard variant of agreement.'

Please stop abusing the English language.

I actually looked up "agreeance" before committing to using it as spell-check complained and found the same reference:

Agreeance comes from the Old French agréance and would therefore be expected to be used in areas with (former) French influence. It is also used in New Zealand. But it is commonly viewed as outdated and even wrong in America where “ginormous” is a word. --emphasis mine.

As valid here as "nek minute" I would think.

You're not from around here are you Nic?

My apologies Zach

If you'd have said 'agreeance' where I went to school, well, you'd have got a swift wrap on the knuckles......I shouldn't do the same to others.

I guess I just like the English language used the way it was intended, but maybe I need to calm down a bit on my pedantry. My apologies Zach, to be fair English in England is fast becoming a foreign language anyway so I don't have a leg to stand on. Let's just hope that that doesn't happen here as well.

Have a good evening and good post.


No worries Nic, I always enjoy some pedantry and word discussion. My pet peeve is the lose/loose atrocity. A battle I fear I will eventually loose lose!

good man.. mine's there, their and they're... infuriating!

I blame my keyboard. It just misses words and letters and gets all mixed up. Then again, I only have so much bandwidth and it's all I can do to stay more or less nearly on topic. Plus, the occasional misspelling or rough grammar can draw attention to a point. A lot creative people can't spell too good (ok, so that's more Texan than Eton, but real English as she is spoke, none the less).


Agreeance is not in my Concise OED, but i understand that it's just you showing-off.

Any statement you make on the US is contaminated by your self-confessed admiration of Trump and the Alt-Right.I find their views abhorrent.

Here comes that recession that Winston warned us about. Forced higher wages is compensated for by reducing hours worked, or making existing workers pick up the slack rather than hiring new workers. You can expect under-employment in particular to begin to increase quickly. And with the population in debt up to their eyeballs, any loss of even a few work hours a week will cause extreme financial stress.

Strange that such a economic stat suddenly turned political.. Its just that we all like to discuss politics and and team up or against parties and enjoy like a good rugby match

My understanding is that traditional "Left-wing" politics are not favoured by business.. but in these modern times, the policies of political parties are mixed.. Lefts has become more right and Rights(???) have become left
The majority consensus was that the previous National govt had to be thrown out; so the coalition formed was as per the voters choice. This was proved correct by the resigning/sacking of previous national ministers/leaders. and the new leader accepts some of the shortcomings of the old govt.

Having said that its fun to watch the political debate here ; bit of break in between too serious( & difficult to understand for a commoner) discussions like interest-rate, credit availability, unemployment numbers, business confidence etc

"The majority consensus was that the previous National govt had to be thrown out; so the coalition formed was as per the voters choice. This was proved correct by the resigning/sacking of previous national ministers/leaders. and the new leader accepts some of the shortcomings of the old govt."

No. The election gave no such consensus.

Nats: 44.4%, Labour 36.9%, Winston 7.2%, Green Party 6.3%, Act 0.5% (Maori 1.2, TOP 2.4)

So Act+Nats got 44.9% (and their previous coalition partners Maori another 1.2). Greens+Labour got 43.2%. Not exactly a great mandate for the left. And before protestations of NZF being a 'vote for change' NZF support is now wallowing around 3% - so it seems most of their 7% election night voters are unhappy with their choice of Labour over National. Their support had fallen from 11% pre-Ardern to 7% at election - so labour had already taken approx 4% from NZF that were more natural labour supporters.

This govt is the choice of a septuagenarian narcissist out for utu and self-aggrandisement, not the voting public.

Nats: 44.4%, Labour 36.9%, Winston 7.2%, Green Party 6.3%, Act 0.5% (Maori 1.2, TOP 2.4)

We can debate over and over on it. When I see YES/NO for the incumbent government, 50+% went against them (including TOP).
And the party itself has dumped the main leaders(ex prime minister, health, fin),; which suggest that government change was the verdict of the people and a policy reset is needed.

You imply they were pushed, but you have nothing to base that claim on, more likely it was personal choices of English, Joyce and Woodhouse not wanting to do a term in opposition when an easier and more rewarding career options beckoned. I think National would love to have kept English - he's was a top talent in the house and as a minister, even if he lacked a little in the Charisma stakes. Joyce and Woodhouse were also very effective Ministers that would have continued to be assets to National if they had decided to stay. But frequent renewal and bringing in fresh blood is a hallmark of the National Party.

Woodhouse simply refused to act when rorts and exploitation and downright corruption occurred related to his preference for low-wage immigration. Entirely his responsibilty since changing the income levels and getting the labour inspectorate active was his call - didn't need any approval by parliament. His only action was to suspend publishing the Immigration .CSV statistics - a problem still not solved by the current govt. See
Very happy to see the back of Woodhouse. Lees-Galloway may be rather slow to act but at least he admits there is a problem.

It's probably fair to say that National didn't do enough to convince people they should form the government by themselves.

But it is very fanciful to say that voters chose the CoL, especially when Peters didn't make clear beforehand whom he would anoint. It's most likely that he wouldn't have got 7.2%, if he had made it clear that he would throw his hat in with both Labour and the Greens.

More people are starting to wake up to the fact that NZ's MMP system is bonkers.

It occurs to me that our adoption of MMP is a actually a reflection of our inate conservativism, as MMP acts to reduce the rate of change. Bit like our flag choice. We like trying new things out, but are cautious about rushing into fundamental change.

Having said that, I used to think MMP was a good idea, but now think it doesn't really act as advertised as it gives excessive leverage to special interests. In short, it's a con.

But 46.8% voted left (labour, green, Maori and TOP) while only 44.9% voted right (national and act). So I think we have a fairly reasonable outcome, don’t you? If we still had first past the post, the chances are the same result would have occurred.

You are saying TOP, the vanity project of an arch capitalist and Maori with 9 years in government with National were left? Are you going to try to claim NZF as well? Their latest poll is at just 2.4% after Winston screwed over his right leaning support base.

Maori are definitely left.
TOP is debatable, however a lot of young voters wanting cheaper houses voted TOP - they wouldn’t have voted national!
Who knows which way NZ first voters lean. Even they don’t.
You must admit in a first past the post two party election it would have been very close. Maybe enough NZF voters would have voted national, who knows.
To say national should have won because they got the most votes is stupidity. They only got the most votes because there were no other right wing parties worth voting for.


I think I voted for FPP or STV if we really had to change things in the 1992 Referendum.

Many senior politicians in both major parties and businesspeople were opposed to MMP: Bill Birch, then a senior National Cabinet Minister, had said MMP would be "a catastrophic disaster for democracy", and Ruth Richardson, former Minister of Finance in Jim Bolger's government said MMP "would bring economic ruin". Peter Shirtcliffe, chairman of Telecom New Zealand at the time and leader of the CBG, said MMP "would bring chaos". Wikipedia


I suppose FPP might be better then having a party that was propped up by Epsom and some guy who wears a bow tie. Regular NZers those guys, not sure how many rugby matches at the local footy ground those people will go to.

Jim bulger has admitted he was wrong and MMP is better. I imagine Richardson would do too. They were definitely wrong about economic ruin, our economy is so much better than it was in the 80’s