The Government had nowhere to hide yesterday when the
unemployment figures were released and they proved to be the
highest since March 1999, when Dame Jenny Shipley was prime
• Not as bad as I
first thought: Scandrett
Tertiary Education, Skills and Employment Minister Steven
Joyce was left clutching at cliches when Statistics New
Zealand figures showed unemployment rose to an annual rate of
7.3% in September, up from 6.8% in June.
The Household Labour Force Survey confirmed New Zealand was
not immune to "global economic headwinds", was Mr Joyce's
response to soaring unemployment.
Economists also had nowhere to hide after forecasting
unemployment would fall to 6.7%.
Business and Economic Research Ltd (Berl) chief economist
Ganesh Nana was the closest with his prediction unemployment
would rise to about 7%.
"Despite our forecast being almost spot on, it gives us no
pleasure whatsoever to see the official unemployment rate
rise to 7.3%," he said.
With a labour market as weak as this, inflation below 1%, and
a host of evidence the economy slowed sharply in the
September quarter, it is clear the Reserve Bank will not
consider raising the OCR any time soon.
In contrast, Australia's unemployment rate was unchanged at a
lower-than-expected seasonally adjusted 5.4% in October from
September, the Australian Bureau of Statistics said
Economists had expected the jobless rate to rise to 5.5%.
The higher New Zealand unemployment figures came the same day
as news of more job losses in the South Island,
Christchurch-based Dynamic Controls saying it intended to
close its New Zealand manufacturing operations at the cost of
40 to 60 jobs.
Earlier this week, NZX-listed Rakon announced it was shifting
some of its operations offshore and 60 jobs were expected to
Employment contracted in the September quarter and the fall
of 8000 people employed brought the employment rate down to
Statistics NZ industry and labour statistics manager Diane
Ramsay said the unemployment rate had stayed between 6.4% and
6.8% for the past two years, and had now risen for the third
In the September 2012 quarter, 13,000 more people were
unemployed: 10,000 men and 3000 women.
Employment fell for the second quarter in a row.
"This fall was reflected in a decrease in the number of men
employed full-time. In contrast, the number of women employed
increased over the quarter," she said.
Council of Trade Unions secretary Peter Conway called for the
Government to make jobs a priority.
"The Government needs to act on jobs now. We have 400,000
people out of work or looking for more work. This is a
Long-term unemployment was also growing. Nearly a third of
unemployed people had been out of work for more than six
The number out of work for more than a year was almost twice
what it was a year ago, Mr Conway said.
People were struggling to find jobs, or enough hours to
support their families. They deserved support and deserved a
government that cared and was prepared to do something to
make jobs a priority.
"These are not just numbers: they are people and families.
They deserve support and the Government needs to give urgent
attention to the jobs plight now," he said.
Mr Joyce said despite the latest data, New Zealand's
unemployment rate remained better than most OECD countries
and was equal with Canada.
"It's always difficult for people when they lose their jobs,
and we appreciate these are challenging times for many
Many of New Zealand's trading partners continued to struggle
with sluggish economies and too much debt, he said. In the
meantime, necessary steps by households and the Government in
New Zealand to save more were moderating domestic growth.
ASB economist Daniel Smith said the weakness outside of
Canterbury was especially evident in Auckland, where
employment fell 2% in seasonally adjusted terms.
That was surprising given economic activity within the region
had looked stronger than most of the rest of the country.
Auckland house prices had been appreciating this year and
surveyed business confidence had been stronger than
elsewhere, he said.
The fall in employment was centred on full-time employees, he
said. Full-time employment fell 0.8% on a nationwide basis,
and part-time employment increased 1.4%.
That partially offset a 3.2% drop in part-time employment in
the previous quarter.
The drop in full-time employment meant hours worked in the
three months ended September fell by 0.8% to be 2% lower than
a year ahead.
Employment in the manufacturing and education and training
sectors continued their shrinking trend but employment in
public administration and safety stabilised.
Employment in construction was surprisingly weak, falling
0.1% in the quarter; the third successive quarter of falling
Mr Smith said ASB expected employment in the construction
sector to improve as the Canterbury rebuilding gained
"Difficulty in finding skilled labour may be holding back
growth in this industry."
The latest unemployment figures reinforced the Reserve Bank's
waiting until September next year before listing the official
cash rate, he said.
At a glance
September 2012 (all figures are annual)
• Unemployed: 175,000, up 12.4%.
• Employed: 2.22 million, 0%.
• Not in labour force: 1.1 million, up 0.07%.
• Working-age population: 3.5 million, up 0.8%.
• Unemployment rate: 7.3%, up 0.7%.
• Employment rate: 63.4%, down 0.5%.