Jobs up, job seekers up even more

Stats NZ reports:

The unemployment rate rose to 5.7 percent in the December 2014 quarter, while the labour force participation rate reached a record 69.7 percent, Statistics New Zealand said today.

“Employment didn’t keep up with the record number of people entering the labour force, so even though employment growth was also strong over the quarter, the unemployment rate increased,” labour market and households statistics manager Diane Ramsay said

Annually, the number of people employed rose 3.5 percent in the Household Labour Force Survey (HLFS). While Auckland and Canterbury remain key contributors to national employment growth, employment growth in Canterbury eased in the year to the December 2014 quarter compared with previous quarters.

Eric Cramption notes:

NZ’s latest labour force survey numbers are really good news. Sometimes, an increasing unemployment rate is just fine. This quarter is one of those times and don’t let anybody tell you different.

The Labour Force Participation Rate has almost cracked 70%. Wage earnings growth is well in excess of CPI inflation. The increase in the unemployment rate coincides with a simultaneous, and bigger, increase in the employment rate: more people are being drawn into the labour force by strong employment growth. Some of those new-to-the-market or returning-to-the-market workers could take a little while to land, and so the unemployment rate is higher. 
And remember too that we’re also in the midst of very high net migration to New Zealand. 
Remember: increasing unemployment rates while labour force participation is increasing even faster generally is a good sign. Decreasing unemployment rates while labour force participation is dropping hard is generally not a good sign: it means people are giving up on the idea of getting a job. 
Year-on-year, the employment rate is up a full point, the unemployment rate is down a third of a point, and LFPR is almost up a point. Smokin’.
The raw numbers are quite huge:
  • Employment is up 27,000 for the quarter (and 80,000 for the year)
  • The labour force has grown 36,000 for the quarter (and 76,000 for the year)
  • Manufacturing jobs increased by 10,000 in the quarter
  • FT jobs are up 69,000 on a year ago and PT jobs up 11,000

Also average hourly earnings increased 2.6% over the year, which with inflation at 0.8% is a 1.8% real gain.

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