NZ's unemployment rate highest since 'winter of discontent' in 2000

Thursday 5th November 2009

New Zealand’s unemployment rate climbed to its highest level since the so-called “winter of discontent” in 2000 as firms continue to struggle with the fall-out of the global financial crisis which has pushed up joblessness for seven straight quarters.

The unemployment rate rose to a seasonally adjusted 6.5% in the latest Household Labour Force Survey released by Statistics New Zealand, the highest level since the March 2000 quarter. Some 150,000 people are out of work and looking for jobs – that’s the most since March 1994. Still, it could’ve been worse if companies hadn’t decided to sacrifice profits to retain staff, according to Finance Minister Bill English, who is picking the unemployment rate to reach a peak around 7% next year.

“I think the numbers are telling us that businesses have made smaller profits and bigger losses than probably was expected through this recession,” he said in an interview on Radio New Zealand. “Some of them have held on to their employees even though they were losing money because they didn't want to lose skilled people that they worked pretty hard to find in the last few years.”

Participation in the labour force fell to 68% in the September quarter from 68.4%, while the number of people officially unemployed, available but not seeking work or actively seeking but not available to work rose to 254,000 from 236,100 in the previous quarter.

Short-term unemployment, people out of work for 26 weeks or fewer, increased 37% to 96,700, and the number of long-term unemployed, people out of work for more than 26 weeks, more than doubled to 35,500.

The kiwi dollar fell to 72.33 U.S. cents from 72.54 cents immediately before the release.

ASB chief economist Nick Tuffley said the employment rate was weaker than expected, and softer than the signs implied in business survey stabilisation. “The lower than expected labour participation rate and higher than expected unemployment rate are roughly what you would expect to see given the extent of the decline in employment,” he said in a report.

Rising unemployment has become a global problem following the collapse of financial markets last year which saw synchronised recessions in Japan, Europe and the U.S.

American unemployment is expected to have increased to 9.9% last month from 9.8% as the world’s largest economy struggles to reinvigorate itself.

Businesswire.co.nz

Comments from our readers

No comments yet