Unemployment rate drops to lowest in nearly a decade

The strong labour market has delivered another drop in the rate of unemployment. While some forecasters were picking a slight increase in the March quarter over the December figure, it fell from 4.5% to 4.4%.

This takes those without jobs back to the same level as nearly a decade ago in the boom leading up to the global financial crisis in late 2008.

Statistics NZ says this is the fifth consecutive quarterly drop for the seasonally adjusted unemployment rate. The rate of 4.4% is the same as the December 2008 quarter.

The level of labour available, as measured by the seasonally adjusted underutilisation rate, has also dropped – from 12.2% in the December quarter to 11.9%.

“While most New Zealanders are familiar with the unemployment rate, the underutilisation rate is equally as important,” labour market and household statistics senior manager Jason Attewell says. “It provides a broader picture of untapped capacity in the labour market.”

The figure represents a drop of 5000 to almost 340,000 people with the desire and potential to work more.

“Underutilisation includes people who have a job but want to work more hours, or are available to work but aren’t looking, or are looking for work but aren’t available to start within the next month,” Mr Attewell says.

“For example, a mum or dad looking to start work once their child begins school in the coming months, or someone who has just finished high school but hasn’t started looking for a job.”

The fall in underutilisation mainly reflects 9000 fewer people being underemployed, which includes 8000 fewer women. The underutilisation rate for women fell to 14.6% (from 15.2%)

The unemployment rate for men fell to 3.9% (from 4.0%) in the latest quarter while that for women fell to 4.9% (from 50.%).

For Māori, the unemployment rate fell to 9.6%, down from 10.4% a year ago while the underutilisation rate for Māori fell to 20.8%, down from 22.2% in the March 2017 quarter.

Labour market profile
As unemployment figures dropped to near-decade lows, employment growth in the March quarter rose 0.6%, which is up from 0.5% in the previous quarter.

However, participation rate eased slightly from 71.0% to 70.8% .

Wages and working hours increased but by a lower amount than many expected.

The labour cost index (ex overtime) for the private and all sectors both rose 0.3%, with the annual rate remaining at 1.9% and largely unchanged over several years,

In the Household Labour Force Survey, hours worked rose 1.7% during the quarter for an annual increase of 4.9%.

But the Quarterly Employment Survey shows weak to no growth in earnings and hours worked.

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