Shearer slams Govt's 'shrug' over jobless

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 excuses."

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 Shearer said.

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 survey."

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 genuine deterioration.

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.

 

 

 

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