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New Zealand Unemployment rate falls to 3.9 percent – 7 November 2018

The seasonally adjusted unemployment rate fell to 3.9 percent in the September 2018 quarter, Stats NZ said today.

This is down from 4.4 percent last quarter and is the lowest unemployment rate since the June 2008 quarter, when it was 3.8 percent.

The fall in the unemployment rate in the latest quarter reflected a fall in the number of unemployed people (down 13,000) and a strong rise in employment (up 29,000). This quarter’s employment rate rose to 68.3 percent, the highest rate since the series began more than 30 years ago.

The fall in unemployment, in tandem with a fall in underemployment, was key to the underutilisation rate falling to 11.3 percent.

“While this quarter’s unemployment rate is outside market expectations, we know New Zealand has a small economy with a dynamic labour market, and large changes, both up and down, have happened before – in late 2012 and 2015,” labour market and household statistics senior manager Jason Attewell said.

“We also know labour market measures tend to lag behind other economic indicators, which have shown strong and widespread growth in 2018. We’ve seen population growth in the regions, reports of more job ads, high levels of migration and tourism, growing retail sales, and rising exports.”

“Labour market data is most valuable when placed in the context of a time series. The trend series, which reveals the underlying direction of movement, has now fallen for seven consecutive quarters,” Mr Attewell said.

The likelihood that someone would move out of unemployment, from one quarter to the next, rose in the September 2018 quarter when compared with previous September quarters.

A tight labour market can lead to low unemployment – when demand for workers increases to the point where people who are not in the labour force, or are unemployed, secure employment almost immediately on wanting a job.

In the latest quarter, 109,000 people were unemployed – 13,000 (10.5 percent) fewer than in the June 2018 quarter, with 8,000 fewer women and 5,000 fewer men. For both sexes, this mainly reflected 11,000 fewer unemployed youth (15–24-year-olds).

There were 6,000 fewer youth unemployed and not in education, which led to the not in employment, education or training (NEET) rate falling to 10.1 percent. The fall in NEET youth was primarily influenced by men and women aged 20–24 years.
There were also:

  • 5,000 fewer youth who were unemployed and in education
  • 7,000 more youth in education and employment
  • 5,000 more youth in education and not in the labour force.

Text alternative for Labour force and education status of people aged 15–24 years, September 2018 quarter, seasonally adjusted, diagram

In the year to the September 2018 quarter, 73,200 (unadjusted) more people, as measured by the household labour force survey (HLFS), were employed (up 2.8 percent) – 45,200 more women and 28,000 more men.

These regions had significant employment growth:

  • Auckland – up 34,600 (3.8 percent)
  • Waikato – up 8,400 (3.3 percent)
  • Otago – up 6,700 (5.5 percent)
  • Gisborne/Hawke’s Bay – up 6,400 (6.5 percent)
  • Taranaki – up 4,300 (7.1 percent).

Annually, filled jobs, as measured by the quarterly employment survey (QES), increased 1.2 percent (unadjusted) – 23,500 more jobs. Of this increase, 17,500 were held by women and 6,000 by men.

Differences between filled jobs in the QES and employment numbers in the HLFS can largely be explained by differences in survey coverage. The QES excludes some industries (including agriculture), and those who are self-employed without employees (to better fit international standards). Conversely, the HLFS only includes usually resident New Zealanders, so can exclude some temporary seasonal labourers.

The labour cost index (LCI) increased 1.8 percent in the year to the September 2018 quarter, while the analytical unadjusted LCI increased 3.3 percent. Private sector wages increased 1.9 percent, while public sector wages increased 1.5 percent.

Within the QES, wages also grew annually. Average ordinary time hourly earnings increased to $31.34 (up 2.9 percent). Private sector average ordinary time hourly earnings increased 3.6 percent, to $29.38, while for the public sector the increase was 1.6 percent, to $39.31.

Average weekly earnings (including overtime) for full-time equivalent employees (FTEs) also increased annually, up 3.3 percent to $1,212.82 per week.

Text alternative for Labour market summary diagram, September 2018 quarter, seasonally adjusted

Video

See the Labour market statistics: September 2018 quarter video.

Text alternative for Labour market summary diagram, September 2018 quarter, seasonally adjusted

Diagram shows data from September 2018 quarter’s household labour force survey (HLFS), quarterly employment survey (QES), and labour cost index (LCI).

HLFS results for the September 2018 quarter showed the labour force participation rate was 71.1 %, up 0.2 percentage points (pp). This is derived from labour force number divided by working-age population. The employment rate was 68.3 %, up 0.5 pp. This is derived from employed number divided by working-age population. The unemployment rate was 3.9 % over the quarter, down 0.5 pp. This is derived from unemployed number divided by labour force.

The underutilisation rate was 11.3 %, down 0.7 pp. This is derived from total underutilised number divided by extended labour force. The working-age population was up 15,000 to 3,900,000. This is made up of the labour force, up 16,000 to 2,772,000, and those not in the labour force, down 1,000 to 1,128,000. The labour force is made up of employed people, up 29,000 to 2,663,000, and those unemployed, down 13,000 to 109,000.

Average ordinary time hourly earnings from the QES increased 2.9 % to $31.34, annually.
Annual wage inflation from the LCI decreased 0.1 pp to 1.8 %, for all industries and occupations combined.

Filled jobs from the QES were up 0.3 percent to 1,959,000 for the quarter.

Note: HLFS data, unless otherwise stated. Data, including rates, is seasonally adjusted, excluding average ordinary time hourly earnings and annual wage inflation.

Text alternative for Labour force and education status of people aged 15–24 years, September 2018 quarter, seasonally adjusted, diagram

The diagram shows data from the September 2018 quarter of the household labour force survey, for young people aged 15 to 24 years.

The working-age population aged 15 to 24 years grew 1,000 over the quarter, to 671,000.
The number of employed young people rose 6,000 to 387,000. The number employed and in education increased 7,000 to 139,000; the number employed and not in education decreased 1,000 to 248,000.

The number of unemployed young people fell 11,000 to 40,000. Those unemployed and in education fell 5,000 to 17,000; those unemployed and not in education fell 6,000 to 22,000.
The number of young people not in the labour force grew 6,000 to 243,000. Those not in the labour force and in education grew 5,000 to 197,000; those not in the labour force and not in education grew 1,000 to 46,000.

The number of young people aged 15 to 24 years not in employment, education, or training (NEET) is the sum of those unemployed and not in education, and those not in the labour force and not in education. The number of NEET young people fell 5,000 over the quarter to 68,000.

The NEET rate is derived from the number of young people who are NEET divided by the working-age population aged 15 to 24. The NEET rate fell 0.8 percentage points over the quarter to 10.1 percent.

The Government Statistician authorises all statistics and data we publish.

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