More enter the workforce in New Zealand despite unemployment hike
Driven by more people making themselves available for work, the employment rate in New Zealand increased in the June quarter, with wage growth remaining strong. This is despite the official unemployment rate rising to 3.6% in the same quarter, reported Stuff.
The increase in the unemployment rate, said Darren Gibbs, an economist at Westpace, can be attributed to a large number of people joining the workforce. Both unemployment and employment rates can rise at the same quarter as the proportion of people quantified as being available for work increased to 72.4%, the highest since 1986 when Stats NZ began collecting comparable statistics.
The overall working-age population employed rose to 69.8% in the June quarter, an increase by 0.3% from the first quarter of the year.
Despite the rise in rates for unemployment and underemployment, the labour market figures indicate that immigrants, as well as employees just entering the job market, are still finding employment. Overall, the number of people employed increased by 28,000 over the quarter to just over 2.9 million, while the number of officially unemployed increased by 6000 to 109,000 and the number of people who did not fall into either category as they were not in the labour force fell by 10,000, reaching to just over 1.1 million.
Infometrics principal economist Brad Olsen has suggested that more people were entering or looking to enter the workforce due to the increased cost of living. “The data suggests that mothers are rejoining the workforce, given both high costs and higher pay on offer,” he said.