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Unemployment falls to a nine-year low

The seasonally adjusted unemployment rate fell to 4.5 percent in the December 2017 quarter, down from 4.6 percent last quarter, Stats NZ said today.

“This quarter’s unemployment rate is the lowest since the December 2008 quarter, when it was 4.4 percent,” labour market and household statistics senior manager Jason Attewell said. “However, the underutilisation rate was just over 12 percent –reflecting about 340,000 New Zealanders with potential to work more. This measure is just as important as the unemployment rate.”

The unemployment rate for the December 2017 quarter remains considerably above New Zealand’s lowest unemployment rate, which was 3.3 percent, recorded a decade ago in the December 2007 quarter, immediately before the global financial crisis.

In the December 2017 quarter, the unemployment rate for men remained at 4.0 percent, following adjustments to last quarter’s data. By comparison, the unemployment rate for women fell to 5.0 percent, down from 5.3 percent last quarter.

In the December 2017 quarter, the underutilisation rate rose to 12.1 percent, up from 12.0 percent (revised) last quarter and down from 12.4 percent a year ago.

Underutilisation is a measure of the potential labour supply and unmet need for work.

“Underutilisation is a broader measure than unemployment alone, because in addition to unemployment, it also includes people who may be employed but want more hours,” Mr Attewell said. “For example a university student looking for a job in anticipation of graduating, or a parent who has recently returned to the workforce looking to work more days.”

In the December 2017 quarter, the labour force participation rate was 71.0 percent, down slightly from last quarter’s peak of 71.1 percent.

The employment rate held steady at 67.8 percent, the equal highest rate since the series began in 1986, as employment kept pace with the expanding working-age population. Women also remained at their highest ever rate of employment at 62.4 percent.

Annually, employment increased 3.7 percent, with men and women contributing almost equally to the increase. Nearly one-quarter of employment growth came from 25–29-year-olds, while just over one-fifth came from the 30–34-year-old age group.

Over the year, employment growth, as measured by the Household Labour Force Survey (HLFS), was highest in the professional, scientific, technical, administration, and support services industry, up 8.5 percent (25,900 people).

One-third of the annual growth in the professional, scientific, technical, administration, and support services industry came from Wellington, the majority coming from architects, engineers, and related technicians.

In the year to the December 2017 quarter, unadjusted filled jobs, as measured by the Quarterly Employment Survey (QES), increased 1.8 percent (up 33,800 jobs). The main contributors to this growth were the retail trade; and professional, scientific, technical, administration, and support services industries.

The labour cost index (LCI) increased 1.8 percent in the year to the December 2017 quarter. This follows a 1.9 percent increase in the year to the September 2017 quarter.

The Care and Support Worker (Pay Equity) Settlement Act (2017) continues to contribute to annual wage growth in the healthcare and social assistance industry. Had this Act not come into effect, LCI wages and salaries would have increased 1.6 percent in the year to the December 2017 quarter. Pay deal for care and support workers lifts wages provides more information about the impact of this Act on the QES and LCI for the September 2017 quarter.

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