Last week’s wage and employment reports showed that the New Zealand labour market remains bogged down by the effects of the 2008-09 recession.
In the December 2009 quarter, wage growth slowed to a crawl, employment fell by 0.1%, and the unemployment rate jumped to 7.3%, the highest in ten years. We think that the latter overstates the degree of weakness, but the overall message is that the jobs creation machine has yet to kick into action.
Unemployment has hit the same groups as in previous recessions.
Youth unemployment (15-24 years) has risen to 18.4%, from 12.0% a year ago.
Unemployment among Maori and Pacific Islanders has risen from 9.0% to 14.9% in that same time. By industry, construction and manufacturing have been hit hardest during the downturn, though much of the weakness in the December quarter was found in the retail sector, where the usual seasonal increase in hiring was underwhelming.
For the last year or so we’ve advocated using the unemployment rate, rather than the number of people employed, as the better gauge of how the labour market is evolving. The employment figures have been unusually volatile in the past few years, due to recent changes to the seasonal pattern that are difficult for Statistics NZ to correct for.
