Unemployment climbs to 6.7%

New Zealand is joining the world unemployment crisis, with 9000 more people out of work, bumping the total jobless to 160,000.

The national rate is rising sharply at 6.7%.

Analysts called the rise in unemployment "alarming" and a "jobs massacre", on reviewing the household labour force survey released yesterday by Statistics New Zealand (SNZ), covering the quarter to March.

The impacts of "austerity measures", usually attributed to European countries slashing government spending, are now creeping into analysts' jargon in New Zealand.

In the US, expectations of 175,000 new private-sector jobs during April delivered just 119,000, while across the 17 euro-currency countries, unemployment rose by 169,000 in March, creating a record 10.9% unemployment rate.

Spain is staggering under 24% national unemployment and 51% of people under 25 are jobless.

While New Zealand's data said 9000 more people became employed, apparently offsetting the 9000 added to the unemployment figures, the unemployment rate rose 0.3% to 6.7% because of more people in "participation" registering as looking for work.

ASB economist Jane Turner said the decline in employment outside Canterbury suggested the underlying recovery was losing momentum.

"An outsized increase in the participation rate saw the unemployment rate rise sharply to 6.7%, from a previously revised 6.4%," she said in a statement yesterday.

She said recent declines in hours worked coincided with a fall in full-time employment, with corresponding increase in part-time work.

"This suggests that activity may be underperforming businesses' expectations, and has resulted in reducing staff hours," Ms Turner said.

Council of Trade Unions secretary Peter Conway highlighted an increase of almost 50% of people unemployed for more than year, from 12,800 a year ago to 19,100, and said a quarter of all those jobless had been so for more than six months.

"Jobs available are just not increasing fast enough to keep up with people needing jobs," he said in a statement yesterday.

First Union general secretary Robert Reid was scathing of government efforts, highlighting 100 job losses in the textile and carpet industry, including 51 in Oamaru, and Dunedin City Council-owned City Forests' closure of its Milburn plant last week, with 31 job losses.

The Government itself was contributing to job losses, laying off hundreds of public servants.

"These austerity policies are a recipe for disaster and we fear a job massacre will continue through winter," Mr Reid said in a statement.

Minister for Tertiary Education, Skills and Employment Steven Joyce countered that the Government was working hard to create opportunities for businesses.

This work included the expansion of intensive agriculture, aquaculture development, backing the hi-tech industry, supporting the film industry, expanding oil and gas exploration, encouraging foreign investment, and progressing an international convention centre in Auckland.

"We are also investing billions of dollars into critical infrastructure across New Zealand such as the rollout of ultra-fast broadband, more roading and rail, and upgrading the electricity grid," he said.

The SNZ data continued to reflect the challenging job market as New Zealand dealt with the impact of the global financial crisis and Canterbury earthquakes.

"Despite these challenges, over the past year, 20,000 jobs have been created and the number on the unemployment benefit has fallen by 6500," Mr Joyce said in a statement.

- Additional reporting AAP, Reuters

- simon.hartley@odt.co.nz