Post sponsored by NewzEngine.com

Source: MIL-OSI Submissions

Unemployment rate at 4.2 percent in March quarter – Media release

6 May 2020

The seasonally adjusted unemployment rate rose to 4.2 percent in the March 2020 quarter, up from 4.0 percent last quarter, Stats NZ said today.

“Our surveys captured a robust labour market in the period before New Zealand went into COVID-19 lockdown. The unemployment rate has remained stable at around 4 percent since late 2018, after trending down since late 2012,” labour market and household statistics senior manager Sean Broughton said.

“The impact of COVID-19 on the labour market, including unemployment, hours actually worked, and underemployment, should be clearer in the June 2020 quarter,” Mr Broughton said.

“There was a sharp rise in the number of people receiving Jobseeker benefit support at the end of March and start of April, though this is not the same as the official measure of unemployment.”

The lowest unemployment rate since the global financial crisis of 2007–08 was 4.0 percent, recorded most recently in the December 2019 quarter. After the global financial crisis, unemployment reached a high of 6.7 percent in the September 2012 quarter. This was considerably lower than the series peak of 11.2 percent in the September quarter of 1991, which followed significant structural changes to the New Zealand economy. This unemployment series started in 1986.

In the March 2020 quarter, the collection of labour market statistics was impacted by measures taken to slow the spread of COVID-19, at the same time as the ability to work was affected by the lockdown.

“The household labour force survey takes place over 13 weeks each quarter, which means it measures unemployment over the whole quarter rather than a single point in time at the end of the quarter,” Mr Broughton said.

“We are confident these statistics are reliable, though fewer interviews took place in the final weeks of the quarter, following Stats NZ’s decision to suspend face-to-face interviewing, and later, the redeployment of contact centre staff to urgent work answering public calls about the Government’s COVID-19 website.”

The unemployment rate for men rose to 4.1 percent in the March 2020 quarter, up from 3.8 percent last quarter. The unemployment rate for women was unchanged over the quarter, at 4.3 percent.

Using seasonally adjusted figures, 116,000 people were unemployed in the March 2020 quarter. This included 59,000 men and 57,000 women. This was an increase of 5,000 people from the previous quarter, which consisted of 5,000 more unemployed men.

Underutilisation rate up over the quarter, down over the year

The seasonally adjusted underutilisation rate rose to 10.4 percent in the March 2020 quarter, after recording an 11-year low of 10.0 percent in the December 2019 quarter. The underutilisation rate decreased in the year to the March 2020 quarter, down from 11.3 percent in the March 2019 quarter.

“This low underutilisation rate signals there was a robust labour market before the COVID-19 lockdown. As we move into the June quarter, underutilisation, along with measures of usual and actual hours worked, will help capture the difference between people’s demand for work and work available,” Mr Broughton said.

Underutilisation is a broad measure of spare capacity in New Zealand’s labour market. This measure is just as important as the unemployment rate, as it gives us a more detailed picture of the workforce. In addition to looking at people who are unemployed, underutilisation also includes three other groups of people in the labour market: the underemployed, available potential jobseekers, and unavailable jobseekers.

Text alternative for Total underutilisation, March 2020 quarter, seasonally adjusted

Employment and filled jobs up

The seasonally adjusted employment rate rose to 67.5 percent in the March 2020 quarter, up from 67.3 percent last quarter. The employment rate remains close to its peak of 68.0 percent in the September 2018 quarter.

For men, the employment rate rose to 72.4 percent, up from 72.3 percent last quarter. For women, the employment rate rose to 62.8 percent, up from 62.5 percent last quarter.

In the March 2020 quarter, the number of people who were employed rose by 19,000 (0.7 percent) to reach 2,661,000. There were 9,000 more women and 10,000 more men employed than last quarter.

The seasonally adjusted number of filled jobs, as measured by the quarterly employment survey (QES), exceeded 2,000,000 for the first time in the March 2020 quarter, reaching 2,001,800.

Differences between the filled jobs in the QES and employment numbers in the household labour force survey (HLFS) can largely be explained by differences in survey coverage. The QES excludes a number of 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 seasonally adjusted number of filled jobs increased by 19,900 (1.0 percent) over the quarter and 38,100 (1.9 percent) over the year.

More people aged 70 years and over engaging in the labour force

In the March 2020 quarter, 73,200 people aged 70 years and over were in the labour force. The labour force participation rate for people aged 70 years and over was 14.5 percent. This rate has approximately doubled in the past 10 years, up from 7.2 percent in the March 2010 quarter.

“COVID-19 is affecting how we are working, as well as who is working. With the older population considered more vulnerable to COVID-19, we are yet to see how much impact this crisis will have on older people in the labour force,” Mr Broughton said.

The labour force includes:

  • 211,400 people aged 60 to 64 years
  • 107,400 people aged 65 to 69 years
  • 73,200 people aged 70 years and over.

Wage rates increase

The labour cost index (LCI) all salary and wage rates (including overtime) increased 2.5 percent in the year to the March 2020 quarter. This increase continued to reflect the impact of collective agreements signed by nurses, police, teachers, and principals in 2019.

Annually, public sector wages increased 3.2 percent and private sector wages increased 2.4 percent.

This is the second successive quarter private sector wages have increased by 2.4 percent on an annual basis (the highest annual growth since the June 2009 quarter, when it was 2.6 percent). The biggest contributors to the March 2020 quarter growth were the retail trade, health care and social assistance, and construction industries.

The analytical unadjusted LCI increased by 3.8 percent over the year. This measure reflects the change in wages because of a change in quality of work (e.g. more experience), as well as price-related reasons.

In the year to the March 2020 quarter, wages, as measured by the QES, also grew. Across all sectors, average ordinary time hourly earnings increased to $33.14 (up 3.6 percent):

  • Private sector average ordinary time hourly earnings increased 3.3 percent, to $30.99.
  • Public sector average ordinary time hourly earnings increased 3.1 percent, to $41.59.

Average weekly earnings (including overtime) for full-time equivalent employees (FTEs) in the QES also increased on an annual basis – up 3.4 percent to $1,285.50.

Notes for data users

COVID-19 lockdown and labour market statistics for March and June 2020 quarters has more information about the impact of COVID-19 on the collection of labour market statistics.

Labour market statistics: March 2020 quarter incorporates revisions to historical household labour force survey (HLFS) data from the June 2018 quarter to the December 2019 quarter to account for the latest national population estimates. As such, figures published this quarter may differ from those previously published.

Household labour force survey estimated working-age population: March 2020 quarter outlines the effects of this revision.

Text alternative for Labour market summary, March 2020 quarter, seasonally adjusted

Text alternatives

Text alternative for Total underutilisation, March 2020 quarter, seasonally adjusted

Diagram shows data from March 2020 quarter’s household labour force survey (HLFS). The underutilisation rate was 10.4%, up 0.4pp (percentage points). This rate is derived from total underutilised divided by the extended labour force. The unemployment rate was 4.2%, up 0.2pp. This is derived from unemployed divided by labour force. Total underutilised was up 15,000, to 299,000. Underemployed was up 2,000 to 91,000. Unemployed was up 5,000 to 116,000. The potential labour force was up 8,000 to 92,000. Within the potential labour force, available potential jobseekers were up 6,900 to 73,100 and unavailable jobseekers were up 1,000 to 19,000. Note: No seasonal pattern is evident for available potential jobseekers. Therefore, this series is not seasonally adjusted.

Text alternative for Labour market summary, March 2020 quarter, seasonally adjusted

Diagram shows data from March 2020 quarter’s household labour force survey (HLFS), quarterly employment survey (QES), and labour cost index (LCI). HLFS results for the March 2020 quarter showed the labour force participation rate was 70.4%, up 0.3pp (percentage points). This rate is derived from labour force divided by working-age population. The employment rate was 67.5%, up 0.2pp. This is derived from employed divided by working-age population. The unemployment rate was 4.2%, up 0.2pp. This is derived from unemployed divided by labour force.

The underutilisation rate was 10.4%, up 0.4pp. This is derived from total underutilised divided by extended labour force. The working-age population was up 17,000 to 3,944,000. This is made up of the labour force, up 24,000 to 2,777,000, and people not in the labour force, down 7,000 to 1,167,000. The labour force is made up of employed people, up 19,000 to 2,661,000, and those unemployed, up 5,000 to 116,000. Average ordinary time hourly earnings from the QES increased 3.6% annually, to $33.14. Annual wage inflation from the LCI was up 0.5pp to 2.5%, for all industries and occupations combined. Filled jobs from the QES were up 1.0% for the quarter, to 2,002,000.

Notes: 1.  Household labour force survey data, unless otherwise stated. 2. Data, including rates, is seasonally adjusted, excluding average ordinary time hourly earnings and annual wage inflation.

MIL OSI