New Zealand's dole queue has shrunk for the first time this year, raising hopes that employment may pick up sooner than expected.
Social Development and Employment Minister Paula Bennett said 1950 extra people signed up for the unemployment benefit in the week ending October 2 - but more than 2000 went off the benefit, mostly into work.
The result was a net drop of 90 in the numbers on the dole, from a four-year peak of 60,750 on September 25 to 60,660 - the first weekly fall since November.
A major factor in the improvement is the Government's job subsidies for young people, announced on August 2 and now hitting top gear.
Some 990 young people have been placed in work so far under the Job Ops scheme, which pays employers a $5000 subsidy to employ a young person for six months, and 141 have been placed under Community Max, which pays non-profit groups up to $13,437, also for six months.
Ms Bennett warned benefit numbers were likely to worsen again when tertiary education classes end next month, with Student Job Search expecting 35,000 students to register.
"We are obviously celebrating very cautiously because it's just a week. It's far too early to be looking at this as a trend or saying it's going to continue to go down."
But Business NZ chief executive Phil O'Reilly said the figure tallied with other evidence that employment might be picking up much sooner than the September quarter of next year, when economic forecasts have been expecting unemployment to peak at 7.5% to 8% .
"There's a good possibility of a permanent trend downwards [in unemployment] from early next year."
The forecasts that employment would lag behind general economic growth were based on data from economies such as Europe and Japan where labour markets were much more rigid than in New Zealand.
A bigger share of New Zealand workers also worked in small businesses, which generally took on extra workers faster than larger, more mechanised businesses.
Council of Trade Unions secretary Peter Conway agreed the signs were that unemployment would peak sooner than next September and below 8%.
Both men noted there had been no large-scale closures in the past few months, although there was a risk that some businesses might be forced under by the current strength of the New Zealand dollar.
There may be a seasonal effect in the latest figures as meat and dairy processing and other seasonal work increased again after winter.
But some of the biggest declines in the dole queue were in the major cities where seasonal work is least significant.
In size order, there were declines in Auckland, Otago/Southland, Canterbury, Taranaki, Wellington, Waikato and Nelson/Marlborough.
These declines were partially offset by continued increases in unemployment in the Bay of Plenty, Manawatu/ Wanganui, Gisborne/ Hawkes Bay and North land.
Numbers on the unemployment benefit declined from a postwar peak of 177,000 in 1993 to a low of 17,710 in June last year, but have risen almost four-fold since then as the world plunged into recession this year.
However, the rate of increase declined from about 1000 a week between April and August to less than 400 a week in September.
