Unemployment reaches 9-year high of 6%

Paula Bennett
Paula Bennett
New Zealand's unemployment surged to a nine-year high of 6% in the three months ending June, but the increase needs to be looked at in light of the economic events of the past two years, Business New Zealand says.

Business NZ chief executive Phil O'Reilly said New Zealand had been in recession since early last year; much longer than other developed countries.

"The economic environment has therefore been harder in New Zealand.

"An unemployment rate of 6%, compared with much higher rates overseas, should be viewed in that context."

The fact the unemployment rate was not higher was a testament to the loyalty of New Zealand employers, who had demonstrated great commitment to retaining staff, he said.

However, that will be of little comfort to the people who lost their jobs in the June quarter.

Government statistician Geoff Bascand said the unemployment rate rose 1% during the June quarter.

It was the largest quarterly increase since the September 1988 quarter.

The female unemployment rate increased by 1.5% to 6.3% during the quarter, while the male unemployment rate increased by 0.6% to 5.7%.

During the quarter, the number of people unemployed reached 138,000.

The increase was largely driven by a rise of 15,000 in the number of females unemployed, he said.

The number of unemployed males went up in the quarter by 8000.

In the past 12 months, the number of unemployed rose by 48,000.

Females also bore the brunt of the downturn in the number of people employed, which went down to 2.17 million in the quarter.

Full-time employment fell by 18,000 and part-time employment by 7000.

The decrease was driven by female full-time employment, which fell by 16,000.

The shift from full-time to part-time employment was reflected in the number of actual hours worked per week, which fell by 1.9% in the June quarter.

In a statement, Social Development and Employment Minister Paula Bennett said the biggest quarterly increase in the unemployment rate since 1988 was "obviously" of concern to the Government.

"New Zealand continues to feel the effects of this global downturn. But we're holding up internationally with an unemployment rate well under the OECD average of 8.3%.

"While that's no comfort to those who are looking for work, this Government is taking an active and balanced approach to turning the economy around to create more jobs."

Young people continued to be affected more than any other age group.

The unemployment rate for 15- to 19-year-olds was up 7.5% on a year ago.

For the 20- to 24-year age group, the increase was 4.7%.

Young people were having to compete with more experienced workers for jobs.

"We know how tough that'll be. That's why we've created the Youth Opportunities Package to give them some experience in the labour market," Ms Bennett said.

Council of Trade Unions economist Bill Rosenberg warned Treasury's May forecast of an unemployment peak of 8% in late 2010 could be exceeded.

At the present rate of job losses, up to 200,000 could be out of work by then.

The CTU was calling for the Government to expand assistance across the labour market, including investment in job-creation schemes.

It should also increase investment in skills both in the workplace and in tertiary institutions, he said.

As unemployment had increased, so too had the working-age population.

That was probably a sign of the financial stress in households as more members sought work to compensate for job losses and falls in income, Mr Rosenberg said.

Australia's unemployment rate was a seasonally adjusted 5.8% in July, compared with an unrevised 5.8% in June, the Australian Bureau of Statistics said.

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