Unemployment drops to 6.0%

May 6th, 2010 at 12:30 pm by David Farrar

has fallen from 7.1% in December (was 7.3% before adjusted) to 6.0% in March, which is welcome news.

Always important to look beyond the headlines, to see what makes this up:

  • Employment up 22,000 from 2,155,000 to 2,177,000
  • FT employment up 26,000 and PT employment down 3,000
  • Unemployment down 25,000 from 165,000 to 140,000
  • Labour force shrinks by 3,000 but participation rate constant at 68.1%
  • Unemployment rate goes from 7.1% to 6.0%
  • Maori unemployment drops from 15.4% to 14.2%
  • The jobless (includes those not looking or available for work) drops from 275,900 to 263,000
  • The number of hours worked in the quarter up 1.7% seasonally adjusted which is 2nd largest quarterly growth since Dec 2004
  • Underemployment (those wanting more hours) drops from 114,600 to 99,900

These can only be regarded as very good numbers. The fact it is FT job growth that has driven the drop is especially welcome. In fact checking through the data series, the increase in FT employment of 26,000 is the greatest (seasonally adjusted) quarterly increase in its history (started 1986).

Furthermore, the drop in both the number unemployed (25,000) and the unemployment rate (1.1%) are also both the greatest falls in the history of the HLFS.

I note youth unemployment remains very high at 25.2% for under 20 year olds. Again – the abolishment of youth rates has priced many teenagers out of jobs.

Now the HLFS is just a survey. A large one of 30,000 so with a small margin of error. It is quite possible this result is slightly exaggerated, and this may correct itself in June. But even with that in mind, it is still obviously a very good result.

Looking at the regional results, the rural regions seem to be doing best, but the industry results show the largest increase in employment has been in manufacturing, followed by wholesale trade.

A very good result as I say, but still a lot more work to be done. And let us remember that the Government can do its part to to help (or hinder) but primarily it is private sector employers who are responsible – they are the ones making the decisions to take on more staff, as they can afford to.

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40 Responses to “Unemployment drops to 6.0%”

  1. Monty (944 comments) says:

    Labour will hate this – Good news for everyone else. Proof that National policies are working. I expect to see and enjoy lots of crowing today from the Government benches.

    Cunliffe will be the most annoyed – his whole rebuttal speech for the budget in a couple of weeks is based upon there being no job growth. But noone is listening to labour anyway so like his leader (Goof) what ever he says will be disregarded and irrelevant.

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  2. toad (3,654 comments) says:

    Time for a decent increase in the minimum wage then. They no longer have the old excuse (that isn’t borne out by research) that raising the minimum wage in times of high unemployment will worsen the unemploymetn figures they used to justify the miserly 25cents an hour increase last month that barely kept up with inflation.

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  3. Bevan (3,965 comments) says:

    Must be another one of those rogue polls.

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  4. Eisenhower (134 comments) says:

    Unfortunately this will force Bollard’s to increase the OCR probably sooner and possibly larger than expected. However I hope he bears in mind in own musings today when he says “We are not talking about tightening policy yet. We do not expect to have to touch the brake pedal for the some time.”

    He should place more weight on last month’s CPI and next month’s Q1 GDP before stifleing the life out potentially strong economic growth.

    Toad, demands for “decent” wage increases will be inflationary. If you want unemployment to keep falling then the left should be mindful of the growth constraints and CPI increases that pay demands induce. What low income workers gain in one hand would be forced to hand over with the other in rent/mortgage rises.

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  5. Bevan (3,965 comments) says:

    Gee Toad – where were you lot when Labour were in power?

    Or have you finally found your voice?

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  6. Grizz (476 comments) says:

    Toad, The high youth unemployment reflects the high cost of employing low skilled/experienced teenagers given the high youth minimum wage. I know you will pluck some pie in the sky reason to explain this away, but you have to admit the high youth minimum wage is a big barrier to employing teenagers. Increasing the minimum wage will only exacerbate this problem.

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  7. backster (2,000 comments) says:

    The impact of the illogical refusal to allow youth rates will see a lower rate of individual productivity when current youth eventually are absorbed into the adult workforce without having been given the opportunity to develop a work ethic. Indeed they are being obligated to develop a benefit entitlement ethic.

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  8. big bruv (12,320 comments) says:

    “Time for a decent increase in the minimum wage then.”

    Thus proving that the Greens must NEVER be allowed anywhere near the treasury benches.

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  9. vibenna (305 comments) says:

    I propose a trade off. A strong increase in the minimum wage, and low earner tax cuts, in return for scaling back working for families. A shift from welfare to income.

    Do you agree with that Toad?

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  10. Murray (8,835 comments) says:

    Jesus toad the slightest hint of any growth and you’re at the front of the que with your hand out.

    gimmie gimmie gimmie.

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  11. anonymouse (651 comments) says:

    The HLFS jumped 0.8% in December and has fallen 1.1% in March, this tends to make me think the actual rate is somewhere in the middle at around 6.4-6.5.

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  12. gravedodger (1,426 comments) says:

    Griz said it Toad the facts are that raising the minimum wage has a devastating effect on employment among the young but continue with your idea it is gaining traction for the sane among the voters watching the young struggle to get on the employment ladder when inflated wage values collide with the value of the work.
    If your theory has acceptance why not just legislate wealth for all of us.

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  13. toad (3,654 comments) says:

    @vibenna 1:30 pm – possibly, depending on the detail of how it were proposed to be done. If it involved universalising the In-work Tax Credit element of WFF but reducing its quantum I would be more likely to agree.

    @Murray 1:48 pm – It’s been a long time since I was on the minimum wage – about 32 years I think, so I’m not sure what the “gimmie gimmie gimmie” is all about. It is those far less fortunate than me I am concerned for.

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  14. James (1,338 comments) says:

    Toad:”Time for a decent increase in the minimum wage then. They no longer have the old excuse (that isn’t borne out by research) that raising the minimum wage in times of high unemployment will worsen the unemploymetn figures they used to justify the miserly 25cents an hour increase last month that barely kept up with inflation.”

    ….Except for this 50 odd years of reaserch here…

    50 Years of Research on the Minimum Wage

    http://www.house.gov/jec/cost-gov/regs/minimum/50years.htm

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  15. RightNow (6,336 comments) says:

    hahaha toad, time to call you guys the GREEK party methinks.

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  16. big bruv (12,320 comments) says:

    “It’s been a long time since I was on the minimum wage – about 32 years I think, so I’m not sure what the “gimmie gimmie gimmie” is all about. It is those far less fortunate than me I am concerned for.”

    Right!, so your answer is to take it from those who have worked hard, done extra study, made an effort to better themselves and give it to those who have wasted their education and life.

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  17. Ed Snack (1,535 comments) says:

    Toad, those less fortunate than you, you mean those who might vote Green and award themselves permanent unemployment ?

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  18. Grant Michael McKenna (1,151 comments) says:

    This decrease is a fix- National supporters in business are deliberately hiring people to make National look good. :-)

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  19. toad (3,654 comments) says:

    @James 2:16 pm

    Have you actually read the Card/Krueger research linked out of that 1995 US Congress JEC report you cite James? It says the opposite. And there have been numerous other studies since then that have similarly found no correlation, including this one by the NZ Treasury.

    @big bruv 2:27 pm

    By increasing the minimum wage government can reduce spending on WFF and supplementary welfare benefits that top up low incomes and give you the tax cut you so desire bruv. I thought you would be in favour of that.

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  20. big bruv (12,320 comments) says:

    Toad

    I am always in favour of keeping more of MY money.

    Interesting that you still refer to it as government money, it is not, and never has been government money.

    Why not lower the minimum wage Toad, get more DPB and dole bludgers into work and do away with WFF, that is a win/win surely.

    All of the parasites get back into work, they earn more than they do on the dole and everybody is happy.

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  21. Adolf Fiinkensein (2,664 comments) says:

    I pissed myself laughing when I saw this. Poor old dumb-arse Goff was just getting a bit of traction with his bullshit anti mining carry on and John Key pulls the white rabbit out of the hat.

    Take that, you gap toothed little runt.

    Lower Unemployment. Best job growth in a zillion years!!!!!!!

    HA HA HA HA HA HA ha ha ha ha ha ha

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  22. dime (8,746 comments) says:

    heh toad the small business owner/employer.

    got any horror stories for me yet toad? you promised there would be plenty as soon as the 90 day “fire at will” bill came in.

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  23. Julian (20 comments) says:

    GMMcK 2.36pm

    How did you know

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  24. mavxp (490 comments) says:

    If the Governement really want to increase employment levels – they must reintroduce the young persons wage for under 18′s. It’s removal was incredibly destructive to our youth and we have yet to see the full knock-on effects of this policy blunder. It was driven by Marxist idealogy and should be recognised as simply dumb.

    Having said that it would be wise to do so progressively (most politically savvy and therefore pragmatic approach), so whilst increasing minimum wages for all adults (whilst reducing WFF in a trade-off, ala GST increase/ tax cuts), the youth wage stays the same (as under 18s generally dont have families).

    Over the current and the next term, National could effectively bring back the young persons wage AND reduce or eliminate WFF, AND steadily increase the minimum wage in line with inflation whilst fixing the young persons wage (until it becomes an incentive to hire young people again). It wont make the far right happy, but will keep middle NZ happy, and be “politically sustainable” as a policy. It will also be the right thing to bring young unskilled people into the workforce to gain vital life skills (work ethic, communication with adults, learning from doing) and on the job experience for the CV.

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  25. A1kmm (91 comments) says:

    A certain Mark Twain quote comes to mind when reading this post and people’s comments. Note that the figures that David posted are based off the seasonally adjusted figures.

    The unadjusted unemployment rates (Table 3 in http://www.stats.govt.nz/~/media/Statistics/Browse%20for%20stats/HouseholdLabourForceSurvey/HOTPMar10qtr/hlfs-mar10qtr-tables.ashx) were 6.6% in the March quarter, and 6.8% in the December quarter.

    The unemployment rate fell 0.2% from December to March. It usually rises, which is why Stats NZ applies seasonal adjustment. But it is far from clear how the seasonal adjustment interacts with the current high unemployment we are seeing – it is likely that much of the seasonal work is driven by an increased labour supply over summer, but that is less relevant when unemployment is high. So the result reported could be an artifact of applying seasonal correction under conditions when there is less seasonal dependency.

    To put it in context using unadjusted figures from the same quarter each year:
    March 2008 – 4.3% unemployment
    March 2009 – 5.6% unemployment
    March 2010 – 6.6% unemployment

    In addition, unemployment figures can be misleading because they only include people actively looking for jobs, and many people just give up. I worked out the percentage of working age people who are employed:
    March 2008 – 64.9% of working age people employed (1,165,800 working age people not employed).
    March 2009 – 64.6% of working age people employed (1,187,800 working age people not employed).
    March 2010 – 63.6% of working age people employed (1,241,500 working age people not employed).

    This means that there are now 53,700 additional working age people not employed in the last quarter compared to the same quarter in 2009, and 75,700 additional working age people not employed in the last quarter compared to the same quarter in 2008.

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  26. Rick Rowling (776 comments) says:

    Meh – not proof that National’s policies are working, just like the low unemployment figures last decade weren’t proof that Labour’s policies were working.

    IMHO the global economic cycle is a bigger influence than anything our Government does.

    It’s heartening to think that some of our businesses are employing again though.

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  27. jaba (2,068 comments) says:

    can’t wait for Q time replay at 6pm to hear King slamming Paula about the decrease in unemployment .. oh, hold on

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  28. Inventory2 (9,787 comments) says:

    Q: How do you get a small business in New Zealand?

    A: Start with a big business, and implement Green Party policies

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  29. Bevan (3,965 comments) says:

    In addition, unemployment figures can be misleading because they only include people actively looking for jobs, and many people just give up. I worked out the percentage of working age people who are employed:
    March 2008 – 64.9% of working age people employed (1,165,800 working age people not employed).
    March 2009 – 64.6% of working age people employed (1,187,800 working age people not employed).
    March 2010 – 63.6% of working age people employed (1,241,500 working age people not employed).

    So are you going to tell us HOW you got those figures?

    I seriously doubt 1.2 million people were out of work – that would have a been a monumental crisis!

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  30. wreck1080 (3,522 comments) says:

    Yaaa monty you are not quite right.

    DPF is right, this has little to do with government policy as there have been few changes. Unless, the unemployment drop is due to people employed building the national cycleway.

    Yet, Labour will still find this annoying as it ‘appears’ as if national has done something right.

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  31. Komata (963 comments) says:

    Significantly, a union has already started calling the figures ‘misleading’ and saying that they MUST be wrong’.

    Of course they must – after all they come from that hated and dreaded enemy of the ‘working class proletariat’ the NZ National so they could never, ever be actually correct.

    But what if they actually are . . ?

    (Anyone expecting a ‘call from New York when Hellun sees the figures – and should Phil be watching his back . . .?)

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  32. burt (7,085 comments) says:

    toad

    Time for a decent increase in the minimum wage then.

    How do you recommend I cook this goose I have that just started laying golden eggs?

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  33. Clint Heine (1,560 comments) says:

    Err but Toad, surely those worse off deserve to work rather than earn less sitting on a benefit? Your Greek style economic policies are frankly bizarre.

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  34. reid (15,505 comments) says:

    Yep, Rick’s right. Nothing the Nats have done have palpably produced these figures. To use Paul Henry’s words when explaining Liarbore’s economic miracle during their miracle run, a chimp running the economy could have achieved as much.

    Imagine however what the Nats could have done, had they been operating like a proper conservative powerhouse instead of the limp-wristed do-nothing poll-driven fruitcake variety we have right here right now.

    The results would have been twice as good.

    Fuck the more I see of Key the less I’m liking his inactivity and his naive lack of political drive.

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  35. Dirty Rat (504 comments) says:

    Clint Heine

    Fuck off lol.

    Go back to pissing and moaning about University Union membership, you are full of shit on this forum.
    And why the fuck is someone as clever ( in relative terms to you) posting shit on your crap blog.

    Its like any ordinary NZ’r asking Cactus Kate about tax advice

    completely useless

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  36. Robert Black (423 comments) says:

    The Maoris will be exempt from dole cuts.

    It’s only the white dole bludgers who will have to go out and get jobs.

    Poor buggers.

    Hang on, won’t that mean another court action by the Maoris later?

    We weren’t forced to work by you white pricks like you white pricks were!

    Uh oh, I feel major future litigation coming!

    We catched 22 eh bro! And they all undersized but hey we own the coast now thanks to that stupid National Party! Hawhawhaw!

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  37. stephen (4,063 comments) says:

    Significantly, a union has already started calling the figures ‘misleading’ and saying that they MUST be wrong’.

    The union guy this morning was saying that the figures could present a misleading picture of how the economy is ‘still very fragile, don’t relax’ etc – he never said they were wrong. Different unions?

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  38. mpledger (428 comments) says:

    When anything has been seasonally adjusted then you have to think about what difference this makes when you start getting extreme results – both in the statistics and the seasons.

    Now, I bet the number of non-rain hours in the first quarter of the year compared to the last 3 years or so is going to be very, very different. This means all outdoor work will have continued on longer than usual. And since the seasonal effect is likely to be based on prior averages there’s a positive feedback if the season is markedly better from prior ones.

    I suspect once the winter weather sets in then things will go back to a more normal pattern.

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  39. freethinker (648 comments) says:

    My daughter is an employment consultant and she says there is a shortage of jobs being advertised, so does this mean a lot of advertised jobs have been filled – certainly possible. But she also says this situation has existed all this year – does this mean jobs are not being advertised and filled through word of mouth – possible.I note tax receipts are down including PAYE – does this mean people are earning less – likely but then F/T time work & hours are allegedly increasing. Perhaps the hours worked are unpaid – possible. Perhaps the stats are skewed – highly likely and will have to wait for confirmation just like summer – 20 degrees today – possibly summer – cynical – yes, must be my age!

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  40. burt (7,085 comments) says:

    freethinker

    The number of jobs advertised via trademe, seek, etc etc makes no surprise of the fact employment consultants are seeing fewer and fewer vacancies being placed. However I know nothing of the area your daughter works in so I may be well off target with that comment.

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