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Unemployment rate up to 4.3 percent

The seasonally adjusted unemployment rate rose to 4.3 percent in the December 2018 quarter, up from 4.0 percent (revised) last quarter, Stats NZ said today.

The rise in the unemployment rate reflected higher growth in unemployment (up 10,000), as a share of the overall growth in the labour force (up 12,000). Unemployment was largely influenced by more unemployed men (up 8,000). For women, unemployment rose 2,000. For men and women combined, there were 12,000 more unemployed youth (15–24-year-olds).

“The unemployment rate for men rose to 4.4 percent in the December quarter, while it was 4.2 percent for women. This was the first time since June 2010 that this rate was lower for women than men,” labour market and household statistics senior manager, Jason Attewell said.

“In the latest quarter, we adjusted some high-level data to improve its accuracy. This included figures for employed people, those not in the labour force, and hours worked. While this is not the first time we’ve made this type of adjustment, it is the first time we’ve done it before publishing. Previously, we made the adjustment a few quarters later,” Mr Attewell said.

“Without the adjustment this quarter, the unemployment rate would have been 4.4 percent rather than 4.3 percent.”

Data adjustment below provides more information about why we made this adjustment and which data should be used with caution.

The underutilisation rate rose to 12.1 percent in the December 2018 quarter, up from 11.4 percent in the previous quarter. This rise mainly reflected higher unemployment and underemployment. Underutilisation provides a broader gauge of untapped capacity in New Zealand’s labour market.

In the latest quarter, growth in the working-age population (up 25,000) outstripped growth in the labour force. This resulted in a slight dip in the labour force participation rate (to 70.9 percent), although it remains high.

The employment rate fell to 67.8 percent, down from its peak of 68.2 percent in the September 2018 quarter, due to stronger growth in the working-age population than for employment.

“The employment rate is now back in line with rates between the September 2017 and June 2018 quarters,” Mr Attewell said.

Annually, filled jobs, as measured by the quarterly employment survey (QES), increased 1.3 percent (unadjusted) – 25,900 more jobs. Of this increase, 24,200 jobs were held by women and 1,800 by men. The key contributing industries were: construction, education and training, retail trade, and wholesale trade.

Differences between 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 some industries (including agriculture), and people 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.

Wages grow over the year

The labour cost index (LCI) increased 1.9 percent in the year to the December 2018 quarter, while the analytical unadjusted LCI increased 3.3 percent. Private sector wages were up 2.0 percent, while public sector wages increased 1.7 percent.

Average ordinary time hourly earnings in the QES increased 3.1 percent on an annual basis, to reach $31.63. Private sector average ordinary time hourly earnings were up 3.7 percent (to $29.66), while in the public sector they increased 1.8 percent (to $39.54).

“In the December quarter, the nurses’ pay settlement, which came into effect in August 2018, affected LCI and QES public sector wage and earnings measures. Annual wage inflation reflected the remaining two-thirds of the settlement in the latest quarter. For the QES, the key contributor to the increase in public sector hourly earnings came from hospitals,” Mr Attewell said.

Average total weekly earnings for full-time equivalent employees (FTEs) in the QES increased 2.9 percent annually, to $1,227.85.

Data adjustment

In the December 2018 quarter, the survey of working life (SoWL) accompanied the HLFS. This meant we asked employed people extra questions about their working arrangements and conditions.

Including SoWL coincided with more people than expected reporting they had moved from being ‘employed’ to being ‘not in the labour force’ (NILF) in the unadjusted data.
“We concluded that including SoWL has affected some key variables, such as employment and NILF, which led us to adjust the data,” Mr Attewell said.

We further adjusted 10 high-level seasonally adjusted data series, including: employed, NILF, and hours worked, to improve the accuracy of, and coherence between, the trend and seasonally adjusted series. While selected series were directly adjusted, several more series were also affected. For example, when we adjust the number of men and women employed this affects the total number of people employed. We will monitor these series in future quarters and may revise them.

Some seasonally adjusted employed and NILF series were not further adjusted (eg the number of people employed, broken down by age; underemployment; and youth not in employment, education, and training series). These series may show unrealistic movements this quarter. We recommend users exercise caution when considering the latest data and focus on longer-term trends.

In addition, all actual employed and NILF series, including all age, ethnicity, industry, occupation, and regional breakdowns, should be used with caution.

We made similar adjustments to the previous two quarters in which SoWL was run – the March 2008 and December 2012 quarters. These were implemented in the September 2013 quarter.

HLFS data collection in DataInfo+ provides the full list of the affected series and more information about the adjustments we made.

Text alternative for labour market summary, December 2018 quarter, seasonally adjusted diagram.

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