Today's surge in the unemployment rate is not really a surprise.The household labour force survey (HLFS) released by Statistics New Zealand this morning, shows unemployment in the June quarter jumping from 6% of the workforce to 6.8% - that is, an increas
Today’s surge in the unemployment rate is not really a surprise.
The household labour force survey (HLFS) released by Statistics New Zealand this morning, shows unemployment in the June quarter jumping from 6% of the workforce to 6.8% - that is, an increase of 19,000 to 159,000.
The consensus market forecast for today was for a rise to 6.4%.
Although the figure is higher than the consensus forecast, it still represents a correction from what was seen as a rogue result for the March quarter.
The rise follows March’s totally unexpected decline in unemployment from 7.1% to 6%.
At the time that caught everyone by surprise – the consensus forecast was for a small rise, to 7.3%, rather than what was the largest quarterly fall ever.
Many economists put it down to a rogue result, with ANZ National Bank economist Cameron Bagrie saying bluntly at the time “we don’t believe it.” At the time, and spread over two quarters, the HLFS survey sowed a drop in unemployed of 25,000 while official government numbers on the unemployment benefit rose 4,000.
In that context, today’s unemployment figure represents a return to trend, albeit an unwelcome one.
Statistics New Zealand puts the problem down to seasonal adjustments in March \which did not really reflect reality. Usually there is a drop off in seasonal work in the March quarter, as the summer ends, but we did not see that this year.
“We have again reviewed our seasonal adjustment processes and …they remain robust,” said Statistics New Zealand’s Peter Gardiner.
Further trends within the statistics point to a labour market which is slowly improving, but remains more depressed than it has been for some time.
Signs of some growing confidence is in a decrease in the number of part time jobs but a rise in full time employment.
The actual hours worked have also risen by 0.6%.
The percentage of actual labour force participation though remains unchanged at 68%.
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