Unemployment hits 5.0%

May 7th, 2009 at 11:26 am by David Farrar

Could be worse, but I think the worst is yet to come. The March 2009 HLFS reveals:

  • Employment drops by 24,000 jobs
  • increases by 7.000 – or from 4.7% to 5.0%
  • Total Labour force drops 17,000

The revised figures for 2008 have unemployment increasing from 3.5% to 4.7% in that calendar year.

20 – 24 year olds especially hard hit with their unemployment rate going from 7.3% to 12.0% – some of that may be seasonal though. 25 – 29 year old unemployment only went from 4.6% to 4.8%.

Employment changes by sector is interesting:

  • Ag/Forest/Fish up 800
  • Manufacturing down 6,700
  • Construction up 2,700
  • Wholesale/Retail down 31,400
  • Health/Comm up 8,200

One bright spot is number of hours worked did not fall – rose from 73,261 to 73,424. This may be reflected by the fact only 11,000 FT jobs were lost while 16,000 PT jobs went.

Another rare bright spot is our OECD ranking moves from 10= to 9. We are now better off (less worse really) than Australia and Luxembourg. It is worth reflecting that 5.0% is a lot better than OECD average of 7.3% or the US at 8.5%.

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20 Responses to “Unemployment hits 5.0%”

  1. MyNameIsJack (2,415 comments) says:

    How many jobs created by the Jobs Talkfest?

    How many jobs will be destroyed by the creation of the new city of Hide?

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  2. Bevan (3,924 comments) says:

    How many jobs created by the Jobs Talkfest?

    Would you prefer they did nothing?

    How many jobs will be destroyed by the creation of the new city of Hide?

    How much rate payers money can be saved? How much more efficient can the council be made? How much more progress can take place under the super city?

    Stop thinking so one dimensionally.

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  3. MyNameIsJack (2,415 comments) says:

    How many jobs created by the Jobs Talkfest?

    Would you prefer they did nothing?

    I would prefer they did something other than talk.

    So far, no action from the government, just talk or smoke and mirrors like a 9 day fortnight or a cycleway to nowhere. What next? A monorail?

    How much more efficient can the council be made?

    These efficencies will turn out to be illusory. A bit like the fficiencies Telecom, the banks, etc claim by removing front counter service jobs and replacing them with call centres. it doesn’t reduce inefficiency, simply transfers it elsewhere in the economy.

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  4. gingercrush (153 comments) says:

    Not too bad. It shows the economy is more resilient than we previously thought. In terms of what other countries are facing, New Zealand’s unemployment rate is very low and looks set to continue to track lower than other countries. The main loss in jobs is in services and Manufacturing. Those types of jobs just do not recover until consumer confidence is back and businesses are spending again. Whilst investing in infrastructure has seen gains in employment its clear that no stimulus package can recover service and manufacturing jobs.

    I think these numbers show the limits of what an economy can do to save jobs. If we go back to the Great Depression. The new deal directly invested in the manufacturing of goods and this was increased even more during world war II. That saw increased employment. Today’s recession is very different and is very dependent on demand for services and goods to return. That will take time and will depend on other countries demanding goods and services again.

    Those who decry the government not doing anything to save jobs. Need to shape up and shape up fast. The biggest loss of jobs are in areas where no amount of infrastructure spending is going to save those jobs. Until consumer confidence returns and other countries demand more services and goods we should expect more job losses.

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  5. Bevan (3,924 comments) says:

    So far, no action from the government, just talk or smoke and mirrors like a 9 day fortnight or a cycleway to nowhere. What next? A monorail?

    Shit mate, it takes more than a few months to wind back nine years of Labours fuck ups. Give them some time…

    These efficencies will turn out to be illusory. A bit like the fficiencies Telecom, the banks, etc claim by removing front counter service jobs and replacing them with call centres. it doesn’t reduce inefficiency, simply transfers it elsewhere in the economy.

    So what then? Keep the status quo and do nothing? Maybe take Labours lead – throw more money at it and call it a success….

    Yeah, that’ll work.

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  6. paradigm (452 comments) says:

    “Wholesale/Retail down 31,400″

    I dont really have a problem with this figure. We know that people have been consuming too much, using credit and not saving. If we move towards more savings/debt repayment and less consumption, less retail staff will be needed.

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  7. wreck1080 (3,917 comments) says:

    woohoo, and the currency has leapt to nearly record highs. Against the gbp that is.

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  8. bchapman (649 comments) says:

    The amazing thing is how assymetric the jobs loss has been. It always seems to be the low skills jobs that go first. Also note the big leap in PI and Maori unemployment, in Northland, BOP and Auckland. Even though we are right in the middle the biggest recession since 1932, we still have skills shortages in some areas. if we are to become more productive, the government needs to invest in training and getting ours kids to stay at school/uni a bit longer, arguing about public service numbers seems pretty minor compared to this.

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  9. stephen (4,063 comments) says:

    Australian unemployment DOWN?!
    http://www.tvhe.co.nz/2009/05/07/australian-unemployment-also-surprises/

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  10. gazzmaniac (2,307 comments) says:

    We are now better off (less worse really) than Australia

    Bullshit.

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  11. Politic (8 comments) says:

    Australian unemployment is definitely not down. Under Howard self employed contractors increased from around 500 thousand to somewhere over a million. These people are not covered in the official unemployment statistics, and the investigative journalists are slowly challenging the fact that Australia isn’t doing that great. I’m in Canberra, and I can tell you that its exceedingly difficult to get anything more than a hospitality job.

    Seriously, under Labour Australia is going down. New Zealand should be glad that it doesn’t have Labour simply throwing money at this crisis, Rudd is trying to keep consumer spending going, but this is such a poor strategy that its going to fall on its ass.

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  12. gazzmaniac (2,307 comments) says:

    With any luck Labor will be out before the country falls on its arse. That is what everyone I know is hoping anyway. Only 18 months to go!

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  13. PhilBest (5,121 comments) says:

    I have been saying for a long time now that the elephant in the room for Aussie and NZ are our housing bubbles. They are progressing to crash point on a time frame a year or two behind the USA and Europe, thanks largely to the room our reserve bank had to move on base interest rates. But unless our governments address the underlying structural and fiscal reasons that house prices continue to leech investment from production and job creation, we will get ours yet.

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  14. MyNameIsJack (2,415 comments) says:

    And the best (only?) way to do this is a capital gains tax on speculative property. I own rental property and a small business, and I know which one gives me the best tax advantages. As soon as I can leverage a bit more I will take another mortgage and buy another rental. However, tax me on the capital gains and I may well see investing in the business, or another business, as being a better option.

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  15. gazzmaniac (2,307 comments) says:

    Why use capital gains tax at all? In Australia they have a 49% CGT and the bubble here is just as bad as if not worse than in New Zealand. Why not remove the tax off all investments, then people would be able to invest their money in other sectors and actually make money. As it stands you are unlikely to keep pace with inflation with money in the bank or even with aggressive sharemarket funds when they were at their best.
    That said – I have now read some of the ideas that you link to now PhilBest and I put it to you that according to Rodney Dickens from Strategic Risk Analysis (the author of the Rodney’s Ravings newsletters) there might actually be an oversupply of land, especially in coastal regions. Not saying that either of you are wrong, but there might be more to it than just over regulation of land. An interesting read, though.

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  16. bchapman (649 comments) says:

    The bubble in NZ is a lot worse. Remember wages in NZ are a lot lower, so the house price/average wage ratio is definitely higher in Auckland than in say Melbourne or Sydney. NZ needs a CGT.

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  17. gazzmaniac (2,307 comments) says:

    New Zealand (and Australia, for that matter) is overtaxed to begin with, why more tax? It hasn’t worked in Australia, and I don’t know of any place in the world where it has. Tell me about a place where it has, I am interested to know.

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  18. reid (16,457 comments) says:

    Investment is driven by sentiment as much as anything else. Sounds crazy? I’m talking mom and pop money. We don’t have the population to get significant professional investment so most of it here, comes from amateurs.

    In NZ, mom and pop lost big time in the shares after 87 and they resolved thereafter to invest in safer climes. They decided bricks and mortar were as safe as houses. Lo, we had the LAQC regime. Then from the mid-90s to last year we had un-interrupted property gains.

    Just what did the govt expect would happen?

    Just what did the govt do to mitigate the risk, not only to the nation, but to those naive investors?

    Nothing. In Cullen’s words: “a capital gains tax is political suicide in NZ.”

    So they let it run. Do not imagine the govt didn’t know the 87 history would be repeated in a different sector, they knew.

    It’s just they wanted to be re-elected.

    Don’t blame me. I never voted for them. Did you?

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  19. bchapman (649 comments) says:

    Agreed. Neither party has had the guts to tackle this one but they should. The house price bubble had such a bad effect on inflation that it forced the reserve bank to up interest rates. This caused the NZ dollar up via the Japanese carry trade which was a killer for exporters.

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  20. gazzmaniac (2,307 comments) says:

    Yes, it should be tackled. But not with more tax. Reduce tax on other things – including wages and money in the bank.

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