Sharp falls in unemployment and underutilisation

QuarterMenWomenTotal
Jun-063.34.13.7
Sep-063.64.23.9
Dec-063.54.13.8
Mar-073.64.23.9
Jun-073.343.6
Sep-073.23.93.6
Dec-073.33.43.4
Mar-083.643.8
Jun-083.83.83.8
Sep-084.144.1
Dec-084.34.64.4
Mar-095.14.95
Jun-095.665.8
Sep-096.366.2
Dec-096.66.56.6
Mar-105.66.35.9
Jun-106.76.56.6
Sep-105.66.66.1
Dec-1066.56.2
Mar-115.76.46
Jun-1166.16.1
Sep-115.66.36
Dec-116.166.1
Mar-126.16.76.4
Jun-126.26.76.4
Sep-126.66.96.7
Dec-1266.76.3
Mar-135.26.55.8
Jun-135.56.56
Sep-135.56.25.8
Dec-1356.45.7
Mar-145.16.15.6
Jun-144.665.3
Sep-144.66.15.3
Dec-144.86.35.5
Mar-155.25.95.5
Jun-154.86.35.5
Sep-155.36.15.7
Dec-154.75.35
Mar-1655.65.3
Jun-164.75.55.1
Sep-164.75.35
Dec-164.85.85.3
Mar-174.35.64.9
Jun-174.84.94.8
Sep-174.15.44.8
Dec-17454.5
Mar-183.94.84.4
Jun-184.44.84.6
Sep-18444
Dec-184.44.24.3
Mar-193.84.54.2
Jun-193.84.44.1
Sep-193.84.54.2
Dec-193.84.34
Mar-2044.44.2
Jun-203.74.64.1
Sep-204.85.85.3
Dec-204.55.34.8
Mar-214.64.64.6
Jun-213.84.34

Spare labour capacity shrinks

The number of people underutilised also fell sharply over the quarter, falling 13.3 percent (down 48,000 people) to reach 315,000 – the largest quarterly percentage fall since the series began in 2004.

This fall was seen across all three main components of underutilisation (unemployment, underemployment, and the potential labour force) as they fell by roughly equal amounts.

The fall in the underutilisation rate, down 1.6 percentage points to 10.5 percent, is the largest since the March 2013 quarter and second largest fall on record.

Labour market statistics: June 2021 quarter contains more detail on these changes.

QuarterPersons underemployedPersons officially unemployedTotal potential labour force
Jun-06540008200062000
Sep-06530008600063000
Dec-06770008400077000
Mar-07650008700078000
Jun-07680008100080000
Sep-07640008000065000
Dec-07690007600069000
Mar-08680008600088000
Jun-08650008700083000
Sep-08680009200087000
Dec-087700010100091000
Mar-098200011300095000
Jun-0991000132000105000
Sep-09103000141000109000
Dec-0995000150000116000
Mar-1079000135000111000
Jun-1082000152000107000
Sep-1091000140000105000
Dec-1083000144000111000
Mar-1188000140000113000
Jun-1193000141000111000
Sep-1183000139000110000
Dec-1185000141000108000
Mar-1289000149000107000
Jun-1292000150000121000
Sep-1294000158000133000
Dec-1291000148000123000
Mar-1379000136000101000
Jun-1381000141000104000
Sep-1398000139000114000
Dec-13107000136000107000
Mar-1490000136000108000
Jun-1498000127000112000
Sep-1494000130000101000
Dec-1499000137000109000
Mar-1599000138000119000
Jun-1594000138000125000
Sep-1591000141000128000
Dec-1582000125000121000
Mar-1697000134000135000
Jun-16110000132000114000
Sep-16113000132000103000
Dec-1610700014100095000
Mar-17110000132000100000
Jun-17103000130000100000
Sep-1711500013000098000
Dec-17124000123000100000
Mar-18115000120000106000
Jun-18116000127000104000
Sep-18110000112000107000
Dec-18120000121000113000
Mar-19104000116000107000
Jun-1911000011300099000
Sep-199300011700091000
Dec-199300011400086000
Mar-209200012000095000
Jun-20127000117000114000
Sep-20134000151000106000
Dec-2011700013900095000
Mar-21123000133000107000
Jun-2110700011700092000

While the total number of underutilised people has remained relatively unchanged since the global financial crisis, the underutilisation rate has been trending downward since 2009 until the March 2020 quarter.

After observing sudden increases in the underutilisation rate last year as a result of COVID-19 lockdown measures, this quarter saw some of the largest decreases, in quarterly percentage terms, across all components of underutilisation.

“The large decrease in underutilisation shows that spare capacity in the labour market is dwindling, which can potentially result in tighter labour market conditions and lead to upwards pressure on wage rates,” Mr Broughton said.

Tightening labour market puts pressure on wages has more information on wage inflation.

Employment strong across the board

Alongside the rapid fall in the unemployment rate, the seasonally adjusted employment rate increased to 67.6 percent, up 0.5 percentage points on a quarterly basis and 0.6 percentage points over the year.

“Growth in the working-age population has slowed since the June 2020 quarter, as travel restrictions have resulted in large reductions in net migration. The number of people employed has increased faster than the total population, contributing to the increase seen in the employment rate,” Mr Broughton said.

Within the overall annual increase of 46,000 employed people (up 1.7 percent), both full-time and part-time employment grew: full-time employment was up 24,000 (1.1 percent) and part-time employment was up 22,000 (4.0 percent).

QuarterQES filled jobsHLFS employedMEI filled jobs (average)
Jun-173.63.13.5
Sep-173.24.23.4
Dec-173.33.63.1
Mar-183.12.93.5
Jun-182.73.72.5
Sep-182.82.82.1
Dec-182.10.82.2
Mar-191.71.42.3
Jun-192.11.42.3
Sep-192.61.02.4
Dec-193.02.62.9
Mar-202.22.52.7
Jun-200.21.61.1
Sep-20-0.60.40.9
Dec-200.30.60.4
Mar-210.50.20.2
Jun-212.41.72.2

The number of filled jobs, as measured in the monthly employment indicator (MEI), also increased. Using a three-month average of actual filled jobs, the June 2021 quarter was 2.2 percent higher than the June 2020 quarter.

Filled jobs, as measured by the Quarterly Employment Survey (QES), also increased, up by a seasonally adjusted 2.4 percent (48,200 jobs) over the year.

International experiences vary

Labour market activity in other countries continues to be varied, and reflects differences in responses to the COVID-19 pandemic. We have examined how New Zealand compares with selected OECD member countries as they grappled with COVID-19.

Australia has returned to its pre-COVID-19 harmonised unemployment rate and has its lowest unemployment rate in a decade.

“Our hoa (friends) across the Tasman have experienced similar abrupt falls in unemployment in recent months, as borders in both Aotearoa New Zealand and Australia have remained restricted while demand for labour has been strong,” Mr Broughton said.

New Zealand was ranked eighth across 38 OECD countries for the unemployment rate in the June 2021 quarter at 4.0 percent, moving up from 13th place from the June 2019 quarter. In terms of the employment rate (for 15-64-year-olds), New Zealand was ranked third equal with Japan at 77.6 percent for the June 2021 quarter, having moved up from fifth equal from the June 2019 quarter.

New Zealand has seen more rapid improvements in its unemployment and employment rankings, as COVID-19 has continued to impact different countries to varying degrees.

Harmonised unemployment rates(1) from OECD(2) member countries

Country

June 2019 quarter unemployment rate

Peak quarterly unemployment rate in 2020 for each country(3)

Latest available data(4)

Percent

New Zealand

4.1

5.3

4.0

Australia

5.2

7.0

5.2

Canada

5.6

13.1

8.0

Euro area (19 countries)

7.6

8.5

7.9

Japan

2.3

3.0

3.0

OECD – Total

5.4

8.6

6.6

United Kingdom

3.9

5.2

4.8

United States

3.7

13.1

5.9

1. Harmonised rates are seasonally adjusted and conform with standard International Labour Organization guidelines for comparability. Rankings of all OECD comparable countries for the unemployment and employment rate are available in HLFS table data. See OECD data for more detail.

2. Organisation for Economic Co-operation and Development.

3. The peak unemployment rate in 2020 varied between each country from the June 2020 to December 2020 quarter.

4. Latest available ranges from April 2021 to June 2021 and can be monthly or quarterly.

/Stats NZ Public Release. This material comes from the originating organization/author(s)and may be of a point-in-time nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).View in full here.