Unemployment declines as underutilisation rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today.

Unemployment rates for men and women converged at 4.7 percent, as the male rate rose from 4.5 percent last quarter and the female rate fell from 5.3 percent.

“There have been some gains in labour market outcomes, especially for women, over the past two quarters. However, annual changes indicate the labour market still hasn’t returned to pre-COVID-19 levels for men or women,” work, wealth, and wellbeing statistics senior manager Sean Broughton said.

QuarterMenWomenTotal
Mar-053.74.13.9
Jun-053.83.93.8
Sep-053.44.33.8
Dec-053.24.43.7
Mar-063.84.44.1
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-174.74.94.8
Sep-174.15.44.7
Dec-17454.5
Mar-1844.84.4
Jun-184.34.84.5
Sep-18444
Dec-184.44.24.3
Mar-193.94.64.2
Jun-193.74.34
Sep-193.84.54.1
Dec-193.94.34.1
Mar-204.14.44.3
Jun-203.64.54
Sep-204.85.75.2
Dec-204.55.34.9
Mar-214.74.74.7

The seasonally adjusted number of people in unemployment fell by 5,000 over the quarter, with the number of unemployed women falling by 8,000, offset by an increase of 3,000 men. Over the year, 13,000 more people were unemployed – 9,000 more men and 4,000 more women.

“March 2020 was the last quarter before we saw major impacts of COVID-19 on the labour market. Looking at our annual changes, from March 2020 to March 2021, let us see what the labour market was like before and after the impacts of COVID-19,” Mr Broughton said.

Underutilisation bumps up

The seasonally adjusted underutilisation rate increased to 12.2 percent, up 0.4 percentage points quarterly and 1.8 percentage points annually.

Over the year, 56,000 more people were underutilised – equal numbers of whom were men and women – bringing the level up to 366,000.

Underutilisation is a broad measure of spare capacity in New Zealand’s labour market and is just as important as the unemployment rate, as it gives us a more detailed picture of the workforce.

Auckland (which was in alert levels 2 and 3 for parts of February and March 2021) was the only region with a statistically significant annual increase in the underutilisation rate.

Labour market statistics: March 2021 quarter has more detail on statistically significant regional movements for labour market measures annually in Auckland and Otago.

QuarterPersons underemployedPersons unemployedTotal potential labour force
Mar-04680008900074000
Jun-04630008700066000
Sep-04650008200069000
Dec-04710008000068000
Mar-05560008300069000
Jun-05630008300067000
Sep-05540008300070000
Dec-05630008200064000
Mar-06510009000063000
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-1590000141000128000
Dec-1582000125000121000
Mar-1697000135000135000
Jun-16109000132000114000
Sep-16112000132000103000
Dec-1610800014100095000
Mar-17110000132000100000
Jun-17103000129000100000
Sep-1711500013000098000
Dec-17123000123000100000
Mar-18115000121000106000
Jun-18116000126000104000
Sep-18110000111000107000
Dec-18120000121000113000
Mar-19105000117000107000
Jun-1910900011200099000
Sep-199300011700091000
Dec-199200011500086000
Mar-209300012200095000
Jun-20127000115000114000
Sep-20134000151000106000
Dec-2011600014000095000
Mar-21124000135000107000

The main contributor to the annual increase in underutilisation was a 31,000 increase in underemployed people, slightly over half of whom were women (up 17,000). Underemployment refers to people who work part time, but both want and can work more hours.

Increases in underemployment over the quarter, however, came almost entirely from women (up 7,000), with little change for men.

“Women saw a much larger increase in the unemployment rate last year than men, and now we have seen that rate decline over the last two quarters,” Mr Broughton said.

“However, they continue to have a much higher rate of underemployment than men.”

As the number of underemployed people grew over the year, there was a corresponding increase in the additional hours they wanted to work per week, up 520,000 to 1.9 million (unadjusted). If all these hours were able to be filled, it would be the equivalent of an extra 47,000 people working 40-hour weeks added to New Zealand’s economy.

Employment up over the quarter

The seasonally adjusted employment rate rose to 67.1 percent, up from 66.8 percent in the previous quarter, but remained down from 67.7 percent in the March 2020 quarter.

The fall in the annual change in employment rate reflected the number of people who were employed (up 9,000) increasing by a smaller amount than the working age population (up 49,000) over the year.

While national changes in employment were not statistically significant, there was a statistically significant increase in the number of self-employed people without employees (up 24,700). This rise came primarily from women (up 17,500).

Wages steady

The LCI increased 1.6 percent in the year to the March 2021 quarter, with wage inflation remaining steady from last quarter. This is the first quarter since the December 2019 quarter where annual wage inflation has not slowed.

“Typically, March quarters see more muted wage inflation but this quarter we saw modest wage growth as New Zealand continues to have travel restrictions and businesses aimed to retain and attract staff,” Mr Broughton said.

Over the year, the proportion of jobs receiving wage increases rose to 46 percent, up from 45 percent, but remained at historically low levels.

QuarterQES average ordinary time hourly earningsLCI salary and ordinary time wage rates
Mar-084.63.4
Jun-085.33.6
Sep-085.63.9
Dec-085.53.6
Mar-095.53.4
Jun-094.72.9
Sep-093.42.1
Dec-0931.8
Mar-1011.5
Jun-101.31.6
Sep-1021.6
Dec-101.81.7
Mar-1131.8
Jun-112.81.9
Sep-112.82
Dec-112.92
Mar-123.22
Jun-122.62
Sep-1231.9
Dec-122.41.8
Mar-132.41.8
Jun-132.81.7
Sep-132.51.6
Dec-132.91.6
Mar-142.61.5
Jun-142.31.6
Sep-142.81.7
Dec-1431.7
Mar-152.51.7
Jun-152.61.6
Sep-152.21.6
Dec-1521.5
Mar-162.41.6
Jun-162.31.5
Sep-162.11.7
Dec-161.91.6
Mar-172.71.6
Jun-1731.7
Sep-172.81.8
Dec-173.31.8
Mar-182.81.8
Jun-182.81.9
Sep-183.71.8
Dec-183.71.9
Mar-193.42
Jun-194.22.1
Sep-193.22.5
Dec-193.42.6
Mar-204.42.5
Jun-203.52.1
Sep-204.11.8
Dec-203.91.6
Mar-212.61.6

In the year to the March 2021 quarter, QES average ordinary time hourly earnings rose 2.6 percent to $34.52. Men saw a 1.7 percent increase over the year to $36.39, while women saw a 3.7 percent increase to $32.36.

New QES design

We have redeveloped the Quarterly Employment Survey to ensure the QES remains fit-for-purpose. Part of the redevelopment is a new representative sample which is integral to producing accurate measures.

The QES is a stratified sample representing most businesses in the New Zealand economy. While we have made every effort to ensure consistency between the different designs, the March 2021 quarter is the first quarter of the new sample design and, as expected, we saw some changes. A refresh of businesses and weights in the sample can cause larger movements than normal. Previous quarters have undergone back-casting to minimise inconsistencies in the time series. However, these are provisional and are not able to account for all changes. Therefore, comparisons between the March 2021 and earlier quarters should be used with caution.

/Stats NZ Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.