27 August, 1996
EMPLOYMENT STATISTICS HIGHLIGHTS
Highlights of the latest employment statistics report --
Employment has grown 3.9% over the June year with 36,900 full-time jobs, and 25,000 part-time jobs created.
The number of people employed full-time actually dropped by 6,300 in the last three months, with the larger-than-expected rise in 'employed' being mostly in part-time jobs. Part-time work is increasing at more than double the pace of full-time work -- 6.9% compared with 3%.
Note: We have added a new section in our regular Statistics That Matter feature to keep a track of the changing mix of full-time and part-time jobs in the overall 'employed' figures.
Full-time work, however, still dominates the overall statistics, accounting for 78% of the employed labour force, compared to 22% of people in part-time jobs.
At 6.1% official unemployed, NZ rates 6th lowest unemployment on the table of 25 OECD countries, ahead of Australia on 8.8% but behind Switzerland at 3.4%, Japan at 3.6%, Norway at 5.1%, the United States at 5.2% and the Netherlands at 5.9%.
Maori unemployment has dropped slightly from 15.5% to 14.4%, as has Pacific Island unemployment from 15.3% to 13.7%. The NZ European rate is only 4.5%.
The number of unemployed registered with NZ Employment continues to rise with the July figure being 153,292 people.
There were 6,883 notified job vacancies at NZ Employment during July, of which 50% were still unfilled at the end of the month.
Last month, there were 22.2 people registered unemployed people for every notified vacancy at NZ Employment.
Source - NZ Employment fax to the Jobs Letter 14 August 1996
GOOD NEWS FOR JOBS BAD NEWS FOR MARKETS
The good news in terms of job creation was not well received by the financial markets, who immediately pushed up the already high wholesale interest rates. The 0.9% job growth figure was well ahead of market expectations of an increase in the 0.3-0.5% range. The markets are concerned that the Reserve Bank would interpret the data as indicating a continuing risk of wage inflation, especially given skills shortages, and would defer any easing of monetary conditions until at least December. In this way, the NZ markets are becoming much more like the US financial markets where strong employment growth is regarded as a lead indicator for inflation pressures.
Sources - New Zealand Herald 16 August 1996 "Pre-election job figures better than expected" by Patricia Herbert and Sunday Star-Times 18 August 1996 "Fewer jobless bad news for market" by Bob Edlin
ARE PART-TIME JOBS INFLATIONARY?
The market fears that our job-growth figures will lead to wage-led inflation pressures, may not necessarily eventuate, according to Westpac treasury economist Joselyn Stroombergen. She points to the large number of part-time jobs as a key influence that needs to be considered, and says that the implications for inflation were reduced as part-timers are generally paid less.
Stroomberg: "What we have to remember is that when we look at a breakdown of the numbers it is actually all in part-time growth and full-time employment actually fell in that quarter...the first time this has happened in at least a couple of years."
Source - The Daily News 16 August 1996 "Employment growth not likely to push inflation" NZPA
COMMENTS ON THE EMPLOYMENT FIGURES
Comments: Employment Minister Wyatt Creech is pleased with his pre-election statistics: "Even though the economy has slowed a little, the fact that employment has grown and the unemployment rate has dropped demonstrates the resilience of the labour market and confidence in our policies ..."
Council of Trade Unions economist Peter Harris says the jobs figures are a warning signal that things could get worse "very quickly". He says that economic growth is just holding the line and if growth slipped below 2% next year, as was being predicted, then unemployment will increase.
As reported in the last Jobs Letter, NZ is on the edge of a significant surge in unemployment, with a rash of job cuts such as those at the Wellington City Council, Cedenco processing in Gisborne and the Wairoa meatworks layoffs.
Source - The Dominion 16 August 1996 " Jobless figures offer little political ammunition" by Simon Kilroy
JOB ADS FALLING
The ANZ Bank reports that advertisements in the situations vacant columns of major NZ newspapers were down 2.6% on July last year, which continues a declining tend over recent months. Hawkes Bay newspapers were the only region to go against the national downwards trend, by recording a rise in job advertisements of 6%.
Source - report from ANZ Bank Focus 6 August 1996
PACIFIC ISLAND EMPLOYMENT RISING ... BUT WHAT SORT OF JOBS ?
The job figures suggest a big rise in employment for Pacific Islanders -- up more than 13% with an extra 6,400 finding work in the past year. But Taha Fasi of the Pacific Island Chamber of Commerce is concerned that the figures do not tell the real story. He told TV One news that many of the Pacific Islanders now in 'employment' were working long hours for very little. Fasi: "The spoils of the economic recovery have not really trickled down a lot ... and are by-passing many in the Pacific Island community."
Source - TV One news item 15 August 1996 by Lorelei Mason
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