June 2023 sees increase to 3.6%

Statistics New Zealand reported that New Zealand’s seasonally adjusted unemployment rate for the June 2023 quarter increased to 3.6% from 3.3% a year ago. This 0.3% rise was higher than the 0.2% increase seen in the previous quarter (March 2022).

Economists had anticipated a slightly lower unemployment rate of 3.5%, but the Reserve Bank had already taken measures to control inflation, which led to an economic slowdown and the expectation of a further rise in the jobless rate.

The underutilisation rate, a broader measure encompassing unemployed, underemployed, and those in the potential labor force, rose by 0.7% over the year, reaching 9.8% in the June quarter. This was an increase from 9.1% in the prior quarter.

Despite the recent quarterly increase, the June 2023 underutilisation rate remains relatively low compared to historical averages, as stated by Becky Collett, the senior manager of work and wellbeing statistics.

On a positive note, the number of people employed increased by 113,000 (4.0%) to a total of 2,927,000 in the year to the June 2023 quarter. This led to a record high employment rate of 69.8%, the highest since the Household Labour Force Survey (HLFS) began in 1986. The employment rate also grew by 0.3% over the quarter.

Furthermore, the labour force participation rate reached 72.4% in the same period, which was the highest ever recorded by the HLFS since its inception in 1986. It witnessed a 1.5% increase over the year and a 0.4% increase over the quarter.

Over the year to the June 2023 quarter, the number of people not in the labor force decreased by 36,000, contributing to a total labor force increase of 127,000.

In the same period, the working-age population grew by 91,000, encompassing all usually resident individuals aged 15 and over, regardless of their current participation in the labor force.

Regarding wages, all salary and wage rates, including overtime, remained constant at 4.3% as measured by the labor cost index over the year to the June 2023 quarter. However, average ordinary time hourly earnings in the Quarterly Employment Survey (QES) showed a notable increase of 6.9% during the same period.

Meanwhile, average total weekly earnings, which include overtime and are measured by the QES, rose by 6.4% in the year to the June 2023 quarter.