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Unemployment rate edges down to 4.2 percent

1 May 2019

The seasonally adjusted unemployment rate was 4.2 percent in the March 2019 quarter, down from 4.3 percent in the December 2018 quarter, Stats NZ said today.

“The unemployment rate has been mostly trending down since the global financial crisis in 2008,” labour market and household statistics senior manager Jason Attewell said.

“The September 2018 quarter unemployment rate of 4.0 percent was the lowest in a decade.”

The number of people unemployed declined at a faster rate than the number of people in the labour force. This resulted in the unemployment rate falling close to its 10-year low.

The unemployment rate for men was 3.9 percent in the March 2019 quarter, down from 4.4 percent last quarter. For women, it was 4.5 percent, up from 4.2 percent.

The total number of unemployed people in the March 2019 quarter was 116,000. This reflected 7,000 fewer unemployed men and 3,000 more unemployed women.

The underutilisation rate was 11.3 percent in the March 2019 quarter. This is the lowest underutilisation rate since the December 2008 quarter, when it was also 11.3 percent. Underutilisation provides a broader gauge of untapped capacity in New Zealand’s labour market.

In the year to the March 2019 quarter, the number of people underutilised decreased 14,000, to 324,000. There were 8,000 fewer underutilised women and 6,000 fewer underutilised men.

Stats NZ adjusted some December 2018 quarter data, but did not adjust the underutilisation data series. Users are advised to be cautious when drawing comparisons with December 2018 quarter data and to focus on longer-term trends.

Employment rate falls

The employment rate, which reflects the number of people employed as a share of the working-age population (people aged 15 years and older), fell to 67.5 percent in the March 2019 quarter, from 67.8 percent last quarter.

The fall in the employment rate reflected a fall in the number of people employed and a rise in the working-age population.

The employment rate for men fell to 72.3 percent, down from 72.9 percent last quarter. For women, it was 62.8 percent, down from 63.0 percent.

“Generally, employment growth tends to lag broader economic growth by about three months,” Mr Attewell said.

“New Zealand has seen a softening of economic growth as measured by gross domestic product over the last six months, and we now are seeing that softening come through the employment rate.”

The number of employed people increased 38,200 or 1.5 percent (unadjusted) in the year to the March 2019 quarter. Over the same period, filled jobs, as measured by the quarterly employment survey (QES), increased 1.1 percent (unadjusted) – 22,100 more jobs. Of this increase, 18,700 jobs were held by women and 3,400 by men.

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.

Regional employment

In the March 2019 year, employment grew in the following regions:
• Auckland – up 26,600 (2.9 percent)
• Manawatu-Wanganui – up 6,000 (5.2 percent)
• Wellington – up 11,200 (3.8 percent).

The number of people employed in Canterbury decreased 12,400 (3.6 percent) over the year.

“More than half of the fall in Canterbury’s employment came from the construction industry, influenced by the continued wind-down of the post-earthquake rebuild,” Mr Attewell said.

“The total value of building activity in Canterbury has generally trended down since its peak in mid-2016, according to the latest value of building work put in place data.”

People not in the labour force increases annually

The seasonally adjusted number of people who were not in the labour force (NILF) reached 1,164,000 in the March 2019 quarter. This is the highest number of people who are NILF since the series began in 1986.

Annually, 37,800 (unadjusted) more people were NILF – 25,900 more men were NILF, of which 20,600 were aged 55 and older.

Last quarter, an adjustment was made to some seasonally adjusted data series, including employment and NILF. This quarter, Stats NZ reviewed the adjustment and concluded no changes were needed. Stats NZ will continue to review the data adjustment until the December 2019 quarter.

Wage rates grow over the year

The labour cost index (LCI) salary and wage rates (including overtime) increased 2.0 percent in the March 2019 year, while the unadjusted LCI increased 3.4 percent.

The LCI measures movements in wages for a fixed quantity and quality of labour. This means changes in pay rates due to the performance of employees or promotions are not shown in the index.

The unadjusted LCI, on the other hand, also reflects the change in wages because of a change in quality of work (eg more experience). This series is more comparable with the earnings measures in the QES.

The LCI is often compared with the consumers price index (CPI) to see how wage inflation compares with consumer inflation (ie the change in prices of goods and services bought by households). Annual CPI inflation increased 1.5 percent in the year to the March 2019 quarter.

Annually, public sector and private sector wage inflation both were 2.0 percent.

In 2018, several collective agreements have come into force, which have raised wage inflation, such as the nurses’ collective agreement (signed in August last year).

“We are likely to see further increases to wages over the next couple of quarters, as ongoing pay disputes are settled and the minimum wage increase of $1.20 to $17.70 an hour on 1 April 2019 flows through,” Mr Attewell said.

“Lower-paying industries such as retail, and accommodation and food services are most affected by increases to the minimum wage, so we can expect to see growth in these areas next quarter.”

Within the QES, wages also grew over the year. Average ordinary time hourly earnings increased to $32.00 (up 3.4 percent). Private sector average ordinary time hourly earnings increased 3.7 percent, to $30.00. Public sector average ordinary time hourly earnings increased 2.8 percent, to $40.33.

Average weekly earnings (including overtime) for full-time equivalent employees (FTEs) in the QES also increased on an annual basis – up 3.2 percent to $1,243.78.

Labour market summary, March 2019 quarter, seasonally adjusted

From March 2019 quarter’s household labour force survey (HLFS), quarterly employment survey (QES), and labour cost index (LCI). HLFS results for the March 2019 quarter showed the labour force participation rate was 70.4%, down 0.5pp (percentage points). This rate is derived from labour force divided by working-age population. The employment rate was 67.5%, down 0.3pp. This is derived from employed divided by working-age population. The unemployment rate was 4.2%, down 0.1pp. This is derived from unemployed divided by labour force. The underutilisation rate was 11.3%, down 0.8pp. This is derived from total underutilised divided by extended labour force. The working-age population was up 13,000 to 3,939,000. This is made up of the labour force, down 8,000 to 2,774,000, and people not in the labour force, up 21,000 to 1,164,000. The labour force is made up of employed people, down 4,000 to 2,658,000, and those unemployed, down 4,000 to 116,000. Average ordinary time hourly earnings from the QES were up 3.4% annually, to $32.00. Annual wage inflation from the LCI was up 0.2pp to 2.0%, for all industries and occupations combined. Filled jobs from the QES were down 0.1% for the quarter, to 1,962,000. Note: Data, including rates, is seasonally adjusted, excluding average ordinary time hourly earnings and annual wage inflation. Underutilisation series were affected by data quality concerns in the December 2018 quarter. See Datainfo+ for more information.

The Government Statistician authorises all statistics and data we publish.

For more information about these statistics:

• Visit Labour market statistics: March 2019 quarter
• See CSV files for download


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