Virus elimination delivers New Zealand 4% unemployment

Eat this Australia:

Labour market at a glance

  • Unemployment rate fell to 4.0 percent.
  • Underutilisation rate rose to 12.0 percent.
  • Employment rate fell to 66.9 percent.
  • Filled jobs fell 0.5 percent.
  • Average weekly earnings (including overtime) fell 2.8 percent
  • Wage rates increased 2.1 percent annually.
Employment at a glance (seasonally adjusted) Jun 2020 quarter Quarterly change Annual change
Percent Percentage points
Unemployment rate 4.0 -0.2 0.0
Underutilisation rate 12.0 1.6 0.9
Employment rate 66.9 -0.6 -0.6
Labour force participation rate 69.7 -0.8 -0.6
(000) Percent
 Unemployed  111  -5.1 2.1
 Employed  2665  -0.4  1.2
 Filled jobs  1989  -0.5  0.8
 Working-age population  3984  0.5  2.0
 Wages at a glance  Index Percent
Wage inflation (salary and wage rates, including overtime) All sectors 1218 0.2 2.1
Private sector 1222 0.2 1.7
Public sector  1206  0.2  3.0
 LCI analytical unadjusted  1395  0.4   3.1
 $ Percent
 Average ordinary time hourly earnings  33.33  0.6  3.0
 Hours at a glance (figures seasonally adjusted)   Hours  Percent
 Average weekly paid hours for FTEs (QES)  Ordinary time  36.91  -2.6  -2.4
 Total  37.44  -3.1  -3.0
 (millions)  Percent
 Total weekly paid hours (QES)  60.6  -3.4  -1.9
 Total actual weekly hours worked (HLFS)  81.4  -10.3  -9.1
Note:

LCI – labour cost index

QES – quarterly employment survey

HLFS – household labour force survey

FTEs – full-time equivalent employees

Due to rounding, changes do not always sum to the published totals.

Summary

In the June 2020 quarter, unemployment and employment both fell, as more people were not in the labour force.

Underutilisation rose this quarter, as unemployment falls were outweighed by rises in underemployment (people working part-time who wanted and were available to increase their hours) and available potential jobseekers (jobless people who would have been unemployed if they had been actively looking for work).

Hours fell far more sharply than employment, reflecting reduced hours worked during lockdown by people who remained employed. Hours paid for by businesses in the quarterly employment survey (QES) fell less than hours actually worked in the household labour force survey (HLFS), as many businesses were able to continue to pay some or all wages over the quarter.

Wages remained relatively static when quality and quantity controlled in the labour cost index (LCI), buoyed primarily by April’s minimum wage increase, but weekly earnings per FTE dropped sharply in the QES, as steady hourly pay could not compensate for falling weekly hours.

Note: Labour force status classifications unchanged in response to COVID-19

Stats NZ adheres to best practice and required standards set by the International Labour Organization (ILO). These standards have not been changed in response to COVID-19 to ensure international comparability and consistency of estimates.

Note: population reweight

This release incorporates revisions to historical household labour force survey data from the September 2018 quarter to the March 2020 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: June 2020 quarter shows the effects of this revision.

Unemployment

The seasonally adjusted unemployment rate fell to 4.0 percent in the June 2020 quarter, down from 4.2 percent last quarter.

  • For men, the unemployment rate fell to 3.6 percent, down from 4.0 percent last quarter.
  • For women, the unemployment rate rose to 4.4 percent, up from 4.3 percent.

The seasonally adjusted number of unemployed people fell to 111,000 (down 6,000).

  • 7,000 fewer men were unemployed.
  • 1,000 more women were unemployed.

The fall in the number of unemployed people coincided with a rise of 37,000 people not in the labour force.

Underutilisation

The seasonally adjusted underutilisation rate rose to 12.0 percent this quarter, up from 10.4 percent last quarter. This was the largest quarterly rise recorded since the series began in 2004.

  • For men, the underutilisation rate rose to 9.4 percent, up from 8.3 percent.
  • For women, the underutilisation rate rose to 14.9 percent, up from 12.7 percent.

Now, let’s not get ahead of ourselves. These numbers suffer from the same problems that the ABS’ numbers do. They are also quarterly so smooth the losses.  The falling participation rate will be holding down the UE rate and there are many Kiwis on NZ’s JobKeeper version as well.

There will be an ongoing adjustment for NZ in some external facing sectors as well so further jobs weakness is to be expected.

But it is early evidence that virus elimination will stabilise your economy much better than the groundhog day of suppression.

At 12%, the NZ underutilisation rate is a quantum leap better than Australia’s 19.1%.

David Llewellyn-Smith
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Comments

  1. It’s almost as if millenials should be put in charge. Especially egalitarian ones who care about their citizens. The world may be a better kinder place. Probably full of narcissism though. Haha.

    • Know IdeaMEMBER

      You are probably right, but I am a pedant and I do wonder how a change from the status quo could result in the system being more full of narcissism.

      • Just a mild jab at my generation. I worked in a company with a lot of Type A personality types and the level of narcissism is through the roof. Also social media and instagratificationgram has a lot of answer for.

        • Know IdeaMEMBER

          Understood. But I could not let my own generation get away without mention that it too has its fair share of that characteristic.

    • robert2013MEMBER

      Jacinda lost my respect when she failed to deliver immigration cuts or housing builds. They might happen now as byproduct of the virus quarantine. Pure blind luck.

      • Steve1036MEMBER

        Hard to do either when you’re reliant on an alliance with Winston Peters. Hopefully she wins outright next election.

    • Know IdeaMEMBER

      That seems to be the strategy that Manchurian Dan has adopted. Now that is one long-sighted politician.

  2. Denis413MEMBER

    What’s more impressive is they hadn’t had to rely on immigration fuelled growth to drive employment.

  3. kiwikarynMEMBER

    The numbers are a crock. “The official unemployment rate measures the average unemployment rate during each quarter, rather than the unemployment rate at the end of the quarter.” During the quarter everyone was on JobKeeper and unavailable to work due to being in lockdown.
    End of July had the actual (ie. people receiving welfare) numbers of unemployed at 6.4%, and that wasnt counting people on JobKeeper or the new Covid Income Relief payment. It also doesnt count people who don’t qualify for welfare due to their assets or partner’s income.
    https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/statistics/benefit/2020/income-support-and-wage-subsidy-weekly-update/income-support-and-wage-subsidy-update-24-july-2020.pdf

  4. That number is a total nonsense reconciled against what is going out the door in support payments.

    • Yeah – this is honestly a pretty embarrassing article by MB. Understand the objective, but every man and his dog knows how incredibly ridiculous this post is.

  5. Guess this is why early in Covd days Jacinda requested the 700k NZers livng in Oz not to return home!

    • Know IdeaMEMBER

      What? You mean never? That would be less than charitable.

      I suppose the Kiwis residing in Aus would not likely be selected to play for the All Blacks in any event. So keeping them here should present no major setback to the NZ economy.

  6. 4% headline that is announced is laughable as you say….. no tourists, no international students, blah blah and yet 4% unemployment LOL.

  7. darkasthunderMEMBER

    NZ’s approach is an all-in gamble on protecting people and the economy until there is a vaccine. Everyone isolates, you build a moat and then it’s back to normal life minus verticals like travel, tourism and OS education. It has one singular advantage over the way we are doing things, in that is recognises that changing peoples behaviour is very hard and you probably get one shot at it. Is it risky? Sure. Does it have advantages over aggressive suppression? I think so, because fear, fatigue and the unrelenting bad news of case loads from VIC mean people give up and don’t comply. The sad part is most states of Oz are effectively virus-free and if we had gone a little harder up front in NSW and VIC, we could have had a bubble with NZ and Pacific Islands up and running by now, which would have been good news for airlines, tourism,. Not to mention I could go home and see my Mum.

    • Maintain hope – you may yet get to see your mum. At least she’s safe.

      Manchurian Dan is giving it his best shot

    • The flaw in that thesis is one returning mis-managed case from the sub continent and it all turns to shit. Which is still possible vis-a-vis NZ I would add.

  8. If you believe those numbers, you’ll believe anything.

    What a steaming pile of dog poo…

    We know from jobless claims that the number unemployed is closer to 200k. It’s utter nonsense

  9. It’s election time in NZ. 19th September.

    Another puff piece from Saint Jacinda & her good news media cohort.

    The reality is much of NZ is relying on government handouts and borrowed time – and this is just a deferral until the migrant borne virus breaks out in New Zealand.
    Like we saw here.

    Fact check.
    452,425 New Zealanders are also on government handouts (not counted in this puff piece) plus many have given up even seeking work.
    No jobs. No prospect of jobs.

    New Zealand Labour force participation and overall employment is well down as many people left the workforce entirely.
    Hours worked (down 10%) and the underutilisation rate (12%) slumped at record rates.

    “Laid off workers opted (or were forced) to leave the labour force given the difficulties,” chief economist Nick Tuffley said.
    “labour market conditions are likely to deteriorate from here.”

    Throughout the surveyed period, the NZ Government has used a $NZ13 billion ($A12 billion) wage subsidy scheme to keep Kiwis in jobs.
    It ends this month….

    Those who lose jobs will go on a bulked-up benefit for only 12 week,.. before then reverting to baseline welfare.

    👉🏾So the real impact in New Zealand pushed back to after the election..

    Opposition Finance spokesman Paul Goldsmith said people not trying to find work showed a fall in jobs and confidence.

    “Today’s unemployment figures don’t tell the full story of the jobs crisis we’re in as a country and are masked by the 452,425 people on wage subsidies,” he said.

    “With wage subsidies set to wind down from 1 September, the real cost of this economic downturn will be felt then.”

    👉🏾However if that’s the way the Ardern government wants to spin it – then we should take advantage of it.

    🔻Send back the 670,000 NZ Svc for a start.

    We have 670,000 NZ SCV in Australia.

    New Zealand nationals allowed to live & work in Australia. Many are without any Medicare healthcare entitlement.
    Almost half

    About 350,000 or 53% are NZ born.

    The other 320,000 are non NZ third world lowlife who entered Australia via the SCV loophole.

    Most of the SCV born are old greyhairs.
    The first influx of NZ SCV in the 80’s & early 90’s were relatively skilled & contributors – but now are in their 50’s and 60’s but without healthcare cover (for what’s needed in virus treatment) so they are both a bio security incubation hub & a health care overload risk to Australia.

    The next wave of NZ SCV from the mid 90’s onwards (as NZ came out of recession) were mostly Pacific Islanders, Poms who couldn’t get into Australia doing the SCV bypass, and if they were NZ born – a lower socioeconomic & criminal misfit cohort (As we see in the high number of forced deportations from this era).

    The ones still here on a NZ SCV from this era have repeatedly failed the offers to become an Australian citizen.

    From the late 90’s onwards the NZ Scv intake into Australia was then mostly third world detritus & lowlife.

    The Fiji Indian exodus from the slums of Nandi, the first wave of Chinese & other Asian criminals passport buyers, the Middle Eastern jihadi, the African war criminals who bribed their way to the front of the UNHCR queue, then the Indian, Pakistani, Bangladeshi on the falsified documents as ‘skilled or student visa’.
    To get the NZ passport stamp then enter Australia.

    Stuff that even we wouldn’t let in, or had kicked out.

    We now have 320,000 (47%) of these non NZ born in Australia on the NZ SCV pretext.

    A short tour in the NZ transit lounge, the passport stamp and then entry into Australia on a SCV.

    => The trans Tasman SCV should only ever have been for Australian or New Zealand born – no one else.

    Isolation / elimination?

    Assume no vaccine.
    Assume no herd immunity ( the virus both re-infects as antibodies don’t last, and it also mutates) meaning repeated wave of successive and new infection.

    So at best after 5 or more years and $$ trillions are spent it will come down to;
    🔹Everyone will get infected.
    🔹1.5 -2% will die, 5% seriously injured.
    The rest of the population is weakened and then subsequent waves of the virus mutation continue the impact.

    At best ? A program of introduced infection and constant booster of ‘reinfection’ to maintain resistance & antibodies.

    So given that likelyhood..

    How long would New Zealand be able to stay non-infected island in a surrounding global sea of constant and ongoing full saturation mass virus plague?

    2 years?
    A decade?