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Slight rise in unemployment and underutilisation rates

1 August 2018

The seasonally adjusted unemployment rate rose to 4.5 percent in the June 2018 quarter, up from 4.4 percent last quarter, Stats NZ said today.

“The slight rise in the unemployment rate follows five consecutive falls, from 5.3 percent in the December 2016 quarter to last quarter’s 4.4 percent,” labour market and household statistics senior manager Jason Attewell said. “It remains close to the nine-year low seen last quarter.”

In the June 2018 quarter, the seasonally adjusted underutilisation rate rose to 12.0 percent, up from 11.9 percent last quarter. The underutilisation rate is equally as important as the unemployment rate. It provides a broader gauge of untapped capacity in New Zealand’s labour market.

In addition to unemployment, underutilisation reflects people who are employed part time (working fewer than 30 hours a week) and have both the desire and availability to increase the number of hours they work (underemployment). They are also people who want a job, are available to work but are not looking (available jobseeker), or are looking for work and are not available but will be able to start within the next month (unavailable jobseeker).

“Underutilisation includes a parent looking to start work in the next month once their child begins school, or someone who has just finished high school and wants a job but hasn’t started looking yet,” Mr Attewell said.

In the June 2018 quarter, the employment rate was 67.7 percent. This has remained unchanged for three consecutive quarters, and is the second-highest employment rate since the series began in 1986. The highest was in the September 2017 quarter, when it was 67.8 percent.

The employment rate for men was 72.8 percent. The employment rate for women was 62.8 percent, the highest ever for women.

The employment rate for Māori was 64.6 percent (unadjusted), up from 60.3 percent last year. This was their highest employment rate on record.

Annually, seasonally adjusted total employment was up 93,000 people to reach 2,631,000, an increase of 3.7 percent.

Compared with last year, more people were employed in the following industries:

• healthcare and social assistance (up 26,200)

• professional, scientific, technical, administrative, and support services (up 23,800).


Seasonally adjusted filled jobs, as measured by the quarterly employment survey (QES), increased 1.2 percent annually. This resulted in 23,100 more jobs, to reach a total of 1,953,800. The industries with the greatest growth in jobs over the June 2018 year were education and training; retail trade; and professional, scientific, technical, administrative, and support services.

Differences between filled jobs in the QES and employment numbers in the HLFS can largely be explained by differences in survey coverage. The QES excludes a number of industries, including agriculture, and those 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.

The labour cost index (LCI) increased 1.9 percent in the year to the June 2018 quarter. The minimum wage increase by the Government of 75 cents to $16.50 on 1 April 2018 was the main contributor to higher wage rates for the quarter. However, the Care and Support Workers (Pay Equity) Settlement Act 2017 remains the key contributor for the year, most notably for private sector care workers. Minimum wage pushes up private sector pay rates_ provides more information.

Average ordinary-time hourly earnings in the QES rose to $31.00, an annual increase of 3.0 percent. This reflected a 1.5 percent increase in the public sector and a 3.3 percent increase in the private sector.

The underutilisation rate for the June 2018 quarter was 12.0 %, up 0.1 percentage point (pp). This was derived from total underutilised divided by extended labour force. Unemployment rate was 4.5 %, up 0.1 pp. This was derived from the unemployed divided by labour force.

Total underutilised was 344,000, up 6,000. Underemployed was 117,000, up 5,000. Unemployed was 124,000, up 4,000. Potential labour force was 103,000, down 3,000. From the potential labour force, there were 82,100 available potential jobseekers, down 3,200; and unavailable 21,000 jobseekers, up 1,000.

HLFS results for the June 2018 quarter showed the labour force participation rate was 70.9 %, up 0.1 percentage point (pp). This is derived from labour force divided by working age population. The employment rate had no change this quarter, at 67.7 %. This is derived from employed divided by working age population. The unemployment rate was 4.5 % over the quarter, up 0.1 pp. This is derived from unemployed divided by labour force.

The underutilisation rate was 12.0 %, up 0.1 pp. This is derived from total underutilised divided by extended labour force. The working age population was up 19,000 to 3,885,000. This is made up of the labour force, up 17,000 to 2,754,000 and those not in the labour force, up 3,000 to 1,130,000. The labour force is made up of those employed, up 13,000 to 2,631,000 and those unemployed, up 4,000 to 124,000.

Average ordinary time hourly earnings from the QES increased 3.0 % to $31.00, annually.
Annual wage inflation from the LCI increased 0.1 pp to 1.9 %, for all industries and occupations combined.

Filled jobs from the QES was up 0.8 percent to 1,953,800 for the quarter.

Note: HLFS data, unless otherwise stated. Data, including rates, is seasonally adjusted, excluding average ordinary time hourly earnings and annual wage inflation.

For more information about these statistics:


• Visit Labour market statistics: June 2018 quarter

• See Employment highest ever for women

• See Minimum wage pushes up private sector pay rates

• See CSV files for download

• Open the attached files

ends

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