Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ jobless rate spike stokes talk of Reserve Bank rate cuts

NZ jobless rate spike stokes talk of Reserve Bank interest rate cuts

By Paul McBeth

Nov. 8 (BusinessDesk) - New Zealand's 13-year high unemployment rate has opened the door for the Reserve Bank to cut interest rates to help underpin growth in an economy recovering from the deepest recession in two decades.

The household labour force survey today showed the unemployment rate unexpectedly rose half a percentage point to 7.3 percent in the September quarter. Economists surveyed by Reuters were picking the headline rate to ease to 6.7 percent from 6.8 percent.

Markets are giving central bank governor Graeme Wheeler a 22 percent chance of cutting the official cash rate at the December monetary policy statement, according to the Overnight Index Swap curve, up from 12 percent yesterday. The New Zealand dollar dropped to 81.93 US cents after the employment data, from 82.56 cents immediately before as the prospects for a rate cut grew

"There's definitely a message in the HLFS - the economy is not doing as well as people thought," said Darren Gibbs, chief economist at Deutsche Bank. "Rates are certainly not restrictive and may be stimulatory, but are they stimulatory enough?"

The Reserve Bank has kept the benchmark rate at 2.5 percent since cutting half a percentage point to shore up confidence after last year's February earthquake in Canterbury levelled much of the country's second-biggest city.

Former governor Alan Bollard had indicated he would lift the rate later that year, but shelved those plans after Europe's sovereign debt crisis intensified, stoking fears of another global financial meltdown.

The HLFS has shown rising unemployment for the past three quarters. The number of people employed fell 0.4 percent to 2.22 million in the second quarterly decline, while the participation rate was unchanged at 68.4 percent.

New Zealand’s labour market has been struggling to recover from recession, with employers more keen on taking on part-timers and casual staff than hiring permanent full-time workers.

Just today, Dynamic Solutions of Christchurch said it will shed 40-60 jobs as it winds down its contract manufacturing business. That comes two days after Auckland manufacturer Rakon said it would cut up to 60 jobs as it shifts more work overseas.

Auckland’s unemployment rate rose 1.3 percentage points to 8.6 percent, with the number of people employed in New Zealand’s biggest city at 691,200, the fewest since June last year.

Nationally, full-time employment shrank 0.8 percent to 1.7 million while part-timers rose 1.4 percent to 519,000.

The number of jobless, which includes people who might not be actively seeking work, rose to 294,900 from 271,200, while underemployment, which counts people who are part-time but want to work more hours, rose to 113,300 from 109,500.

Workers in professional, scientific, technical, administrative and support services recorded the biggest decline in jobs, falling to 249,400 from 259,300 in the June quarter, while manufacturing shed 6,100 jobs to 240,400. The number of people working in construction fell to 166,600 from 171,300.

Total hours worked shrank 0.8 percent to a seasonally adjusted 73.18 million and were down 2 percent from a year earlier.

Youths aged 15 to 24 not in employment, education or training (NEET), a target demographic for the government, rose to 13.4 percent from 13.1 percent in the June quarter.

Canterbury’s labour market continued to improve, with the unemployment rate down 5.2 percent, from 6.5 percent in the June quarter. Waikato and the Tasman, Nelson, Marlborough, West Coast regions were the only other areas to show a lower jobless rate.

Northland recorded the highest unemployment rate at 10 percent.

Today’s figures come after the quarterly employment survey showed total filled jobs rose 0.3 percent to a seasonally adjusted 1.715 million, bolstered by a pick-up in part-time workers and a decline in full-time equivalents to 1.35 million.

Gibbs said the difference between the two surveys could be squared up, as the QES doesn't include self-employed people, while the HLFS does. The number of self-employed people dropped 8.1 percent in the year ended Sept. 30.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news