Employment weakness to continue, economist says

Weakness in employment growth continued through the last quarter of 2011 and the outlook for New Zealand's labour market recovery remaining "gradual", ASB economist Jane Turner said.

Statistics New Zealand's (SNZ) household labour force survey, released yesterday, indicated the recovery in the labour market was "fairly soft" towards the end of 2011, she said.

"The unemployment rate fell to 6.3% from 6.6%, but this was entirely due to a decline in [survey] participation, and largely in Canterbury," Ms Turner said.

SNZ industry and labour statistics manager Diane Ramsay said part-time employment rose 3% for the quarter, the largest annual increase being in the education and training sector, but in contrast full-time employment fell 0.8%"A sharp rise in male full-time employment in the September quarter exaggerated the fall in full-time employment this [December] quarter," she said.

Ms Turner said employment growth nationwide was weak, rising just 0.1% during the quarter.

The effects of the Christchurch earthquakes were reflected in a continued decline in employment in Canterbury.

She said the Reserve Bank would look past the decline in the unemployment rate, as it was driven by a statistical quirk, and focus instead on the weakness in employment growth.

"Over the past year, the recovery in the labour market has been barely enough to offset growth in the population, with the unemployment rate remaining reasonably elevated. Coupled with a subdued growth outlook, and potential for further delays to the Canterbury rebuild, the outlook for the labour market recovery remains gradual," Ms Turner said.


Employment
Quarter to December results
• The unemployment rate fell 0.3 percentage points to 6.3%Part-time employment up 3%; full-time employment declined 0.8%.
• 7000 fewer people were unemployed.
• 3000 more people were employed.
SOURCE: Statistics New Zealand


- simon.hartley@odt.co.nz

 

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