September's high unemployment figures continued to haunt the
Government yesterday, with Labour Party leader David Shearer
accusing the Government of trying to shrug off the bad news.
• 'Horrible' unemployment
could bring dollar relief
Prime Minister John Key and Finance Minister Bill English
were failing Kiwis on the most basic and important economic
level - jobs, he said.
Thursday's "appalling" data should have sent shockwaves
through the Government, Mr Shearer said. At 7.3%,
unemployment was at a 13-year high, up 0.5%, representing
13,000 more people unemployed, in just three months.
"But the response of John Key and Bill English was little
more than a shrug of the shoulders and a few muttered
It was not good enough for Mr Key to state he was surprised
at the latest Household Labour Force Survey and wonder what
the next result would look like.
"How could he be surprised. Hasn't he noticed the almost
daily roll-call of job cuts and business closures?" Mr
In previews of the unemployment figures, the Otago Daily
Times reported economists forecasting that unemployment would
fall slightly from 6.8% to 6.7%.
The ODT asked ASB chief economist Nick Tuffley why
predictions were so far out.
Mr Tuffley said the survey was "very volatile" on occasions.
At times during the global financial crisis, employment was
up and down more than 1% from one quarter to another. Each
quarter, one-eighth of the sample changed so the exact same
people were not being surveyed each time.
"Sometimes, the issue is simply the underlying volatility of
The sampling error for employment in the survey at a 95%
confidence interval was plus or minus 1%, or 24,100 people,
quite wide as most reported movements in quarterly employment
were less than the size of the sampling error.
The change in employment was 8000. From a statistical theory
point of view, the third-quarter employment was not
significantly different from the second quarter's level, he
said. It would not be until the December figures were
released that Mr Tuffley would have an idea whether the
third-quarter result was a "statistical noise" or signalled a
Putting aside the volatility, the surprise was the weakness
of the job market outside Canterbury, particularly Auckland.
ASB was expecting a rebound in Canterbury employment, which
occurred, and a fractional drop elsewhere.
The reliability of regional and industry results was weaker
than the aggregated results, he said.
"But at face value, Auckland was weak, which is quite at odds
with the strength of the housing market and consumer spending
in the region," Mr Tuffley said.