Tide turns, a long way to go

Written By: - Date published: 12:52 pm, May 6th, 2010 - 28 comments
Categories: jobs, unemployment - Tags:

The unemployment rate has fallen to 6%, that is something to celebrate. It really is great news for all those Kiwi workers who have gotten back into a job, their families, and their communities.

Manufacturing has led the way, another positive.

But it’s not time to be calling victory. A 1.1% reduction in unemployment only reverses the damage accumulated over the previous six months but it is still higher than it was in June last year when the recession ended.

When National came to power, unemployment had been below 4% for four years and had been lower than Australian unemployment for a decade. Unemployment has been higher than in Aussie since mid-last year and remains higher despite this good news.

6% is an appallingly high rate of unemployment. It is not natural or normal – it only became normal under National in the 1990s and in the last year of the current government.

It is worth noting that it is the seasonal adjustment that made for the big drop – the actual number of jobs fell in the March quarter, just not as much as usual following the seasonal increase in the December quarter.

There are still over quarter of a million jobless Kiwis – people who want to work for whom there are no jobs – 84,000 more jobless than when Labour left office.

28 comments on “Tide turns, a long way to go”

  1. You are aware the world is in a recession?

    • The Baron 1.1

      Mike Cullen and Helen Clark would have used their supreme powers to avoid any negative impacts of the recession, Brett.

      I mean, like, duh.

    • Akldnut 1.2

      Fuck Brett that line is soooo worn out

    • Clarke 1.3

      You are aware the world is in a recession?

      You are aware New Zealand isn’t in recession and hasn’t been since the end of last year? Where is this stellar economic management that Key and English should be delivering, given that the recovery is now well underway?

  2. mung bean 2

    A correction – a drop from 7.1% to 6.0% is not a 1.1% drop – the number of unemployed has reduced by 15.5% in three months from 7.1% to 6.0%

    Furthermore the 6.0% level is surprisingly low when compared with the G7 reates of unemployment to end 2009:
    http://lh6.ggpht.com/_Et4TQ-a0gGU/S2IYw4ho4MI/AAAAAAAAC0k/Jt4txLw-Bhk/s1600-h/g7_urate%5B3%5D.png

    The Euro area is at 10%, US at 9.7%:
    http://www.tradingeconomics.com/World-Economy/Unemployment-Rates.aspx

    and Australia’s holding at 5.3%
    http://www.tradingeconomics.com/Economics/Unemployment-rate.aspx?Symbol=AUD

    • Bright Red 2.1

      It’s not low compared to recent New Zealand history, which is the only important comparison.

      • TightyRighty 2.1.1

        well, BR, seeing as your being a labour shill dick as usual, recent NZ history has it at 7%, so it is low.

  3. RascallyRabbit 3

    Marty did you really read the same document?

    “But this March quarter we have seen an unexpected fall in unemployment, particularly among young men, which is accentuated when seasonal influences are removed.’

    C’mon man you are one of the best economic commentators around the interwebs at the moment don’t let ideology blind your argument all the time…

    Given that there are 84,000 more jobless than when Labour left office it would also be useful to point out that the unemployment rate has been rising since the December 2007 quarter almost a full-year before National took office.

    • Bright Red 3.1

      check out table 3 of the release http://www.stats.govt.nz/~/media/Statistics/Browse%20for%20stats/HouseholdLabourForceSurvey/HOTPMar10qtr/hlfs-mar10qtr-tables.ashx

      Actual series (ie not seasonally adjusted):

      employment from 2,175,000 to 2,170,000.

      You can see the same numbers at the ends of tables 4 and 5 as well.

      moron.

      • RascallyRabbit 3.1.1

        Oh red of reds could you please share your superior intellect with me and explain the seasonal adjustment process here as I am beginning to think that I could use your wisdom and excel spreadsheet readability to be guided through these dark times.

        • Bright Red 3.1.1.1

          sorry for previous, it was a bit mean and uncalled for.

          seasonal adjustment takes into account that there are seasonal changes in employment (fruit picking, holiday jobs, christmas retail etc), it reports a lower number of employed during the December quarter than are actually employed (2,155,000 SA, 2,175,000 actual) and more than are actually employed in the March quarter (2,177,000 SA, 2,170,000 actual).

          If you want to compare different quarters for statistical purposes you need to use seasonally adjusted figures, just like you need to use inflation-adjusted figures when talking money. But it is still true that in the real world New Zealand in March there were fewer people employed than there were in December.

          • RascallyRabbit 3.1.1.1.1

            Thanks for that

            Although I do have a little bit of a statistical background I had only just looked at the press release and hadn’t examined the data in full detail it was me adding 2 and 2 together and coming up with 6…

            You know what they say about assumption after all!

          • RedLogix 3.1.1.1.2

            Thanks from me too.

            In other words the headline “25,000 fewer unemployed” is just an artifact of the way employment has been reported historically. I can see why, after all if comparing the rainfall in one year to those of previous years it makes sense to do so in comparable seasons. But what if the seasons themselves have changed? Would the comparison continue to be valid?

            So what if the severity and nature of the global recession changed mechanisms underlying the seasonal variations in employment? Would the correction for ‘seasonal variation’ continue to be useful? Not necessarily. Clearly there are some quite searching questions that could be asked of this data.

            Of course none of this matters to the MSM who are trumpeting it as a major propaganda coup for their NACT masters.

  4. Scott 4

    I don’t understand the point of this post.

    So the global financial meltdown, and consequential recession, is National’s doing?

    • Clarke 4.1

      No, the lack of fiscal stimulus, the higher-than-necessary unemployment, the removal of Cullen Fund inputs and resulting investment losses, the static wages and the run-down in public services …. those are National’s doing.

      • Mark 4.1.1

        which will look like like master strokes as we enter the next stage of the recession which started overnight.

        The lefts calls for more borrowing and gambling on stock markets are soon going to look looney

        • Clarke 4.1.1.1

          Remind me again why higher-than-necessary unemployment is a “master stroke” .. or is depriving fellow New Zealanders of a livelihood and inflicting greater poverty on their children also part of that “master stroke”.

          And before you get too keen on the crashing stock markets hypothesis, you might want to have a look at this:

          There is speculation that the huge drop may have been exacerbated by an erroneous trade entered by a person at a big Wall Street bank, multiple market sources said.

          The so-called “fat finger” trade (a trade where someone pushes the wrong button) apparently involved an exchange-traded fund that holds shares of some of the biggest and most widely traded stocks, sources said.

          The trade apparently was put in on the Nasdaq Stock Market, sources said.

          Nasdaq released a statement saying it was working with other major markets to review the market activity that occurred between 2pm and 3pm EST.

  5. pointer 5

    Just a clarification about seasonal adjustment. Seasonal adjustment packages don’t deliberately set out to pin down “fruit picking” or “end of year work” etc. Instead, they just look for bumps in the raw data time series and try to correct for these bumps. Sometimes — for example, when the data are volatile or new seasonal trends begin to emerge, the seasonal adjustment package doesn’t know how to deal with it until things settle down. This may be what has happened, and indeed many commentators were expecting the Dec09 figure to be revised downwards a shade or two. What is surprising is the large drop from the revised Dec figure to 6.0%.

    Also, I second Rabbit. I generally love your economic analysis, Marty, but your Scrooge-like reaction to the new unemployment figures is sadly partisan. Whether or not the govt had a hand in this labour market upturn — and that’s debateable — blaming the high unemployment rate through 2009 on them denies the reality of the recession.

    • Sam 5.1

      “Blaming the high unemployment rate through 2009 on them denies the reality of the recession”

      Does it? The government here did absolutely nothing to stimulate the job market, which is out of step with most of the rest of the world.

      • Sonny Blount 5.1.1

        And 6% is also out of step with the 10% and 9% unemployment rates of those countries that ‘stimulated’ their job markets.

        • Bright Red 5.1.1.1

          like Australia, Sonny?

          A nice man on the telly once said “we can beat those aussies”

          • Sonny Blount 5.1.1.1.1

            Key certainly isn’t doing enough to catch Aus.

            But a recession-busting stimulus package or lack thereof isn’t the reason they’re ahead of us.

            • Clarke 5.1.1.1.1.1

              No, but it is the reason that unemployment is higher than it needs to be. And coincidentally, it’s a contributing factor to the lack of wage growth – although Key is the person who said he would “love to see wages fall”, so perhaps that’s nothing more than National keeping its campaign promises.

  6. Rob M 6

    Can some friendly statistician explain how a 4,400 decrease in numbers employed, a 5,400 drop in unemployed, a 9,900 decrease of the labour force, an increase of 23,400 of those not in the labour force and an increase in the working age population of 13,600 translates into good news.

  7. Name 7

    “There are three kinds of lies: lies, damned lies, and statistics.” (Anon.)

    Are these real jobs producing something useful or is the decrease due to people giving up looking, being forced into driving taxis or pushing a broom at 2 am., or going abroad?

  8. Blue 8

    I think they cooked the books. There’s no reason I can see for such a dramatic fall in unemployment.

    Particularly when the word on the ground is that retail is doing it tough right now and looking to cut back hours.

    With a rise in GST after the Budget, plus the cost increases due to fuel and tobacco taxes and winter heating costs I can’t see that situation improving.

  9. Marco 9

    The Stats New Zealand figures have a margin of error of + or – .5%. The best indication of Unemployment trends are those held by MSD as they are monitored daily (reported quarterly). Whilst those stats don’t give an accurate figure of those who are unemployed they do show the trends more accurately than the Stats NZ data.

  10. RedLogix 10

    But Berl chief economist Ganesh Nana sounded a note of caution, criticising the focus on seasonally adjusted figures, and saying the real story lay in the actual counts of real people.

    On an actual basis the survey still showed the number in jobs in March to be down on a year earlier, and the unemployment rate to now be 6.6 percent compared to 5.6 percent in March last year.

    “This means that there were, in terms of real people, 25,000 more officially unemployed than a year ago. In addition, jobless numbers outside of those officially unemployed grew by a further 14,000 over the same period

    Stuff

    So an increase of 39,000 unemployed over the same March period last year gets headlined into a record decrease in unemployment?

    This whole ‘seasonally adjusted’ thing is only valid if the underlying conditions from one year to the next are comparable.

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