Unemployment hits 4%, up 0.1% from last quarter

The unemployment rate hit 4% in the December 2023 quarter.

According to figures released by Stats NZ today, this is up 0.1% from the 3.9% reported last quarter.

The unemployment rate rose by 0.6% over the year, up from 3.4% in December 2022.

Work and wellbeing statistics senior manager Becky Collett said the unemployment rate has risen to 2019 levels, despite recent "historic lows".

"Low unemployment formed part of the unique economic period from 2021 to 2022, as restricted borders limited increases to labour supply and labour demand remained high."

The underutilisation rate, which is a broader measure of spare labour capacity than unemployment alone, was 10.7% in the December 2023 quarter. This compared with 10.4% in the previous quarter and 9.3% in the December 2022 quarter.

Employers and Manufacturers Association head of advocacy Alan McDonald said the result was better some predicted but he suspected the picture was "actually worse" than what the statistics showed.

"These numbers are from the last three months of 2023. We know anecdotally that the economic situation has further deteriorated, and the real unemployment rate today is likely to be higher. The numbers released today don’t feel right."

McDonald said inflation is beginning to fal but business conditions were likely to remain difficult for some time given interest rates were expected to remain elevated for much of the year.

Earlier, Informetrics chief executive Brad Olsen told Breakfast he expected the figures to increase due to sustained immigration levels.

“Probably a lot of people have not necessarily lost their job, [but] there has been a lot of people looking and not being able to secure a role. That high level of migration means there is going to be more competition in the next year ahead.”

Frog Recruitment Director Shannon Barlow also told Breakfast she anticipated the employment figures would rise for similar reasons.

"We’ve seen this massive influx of migrants come through which has taken a lot of pressure off the market which is a good thing. But sheer numbers of people doesn’t necessarily mean our skill shortages are being covered as well, so I do expect there are still some gaps in there."

Barlow said key shortage areas were in construction, health and engineering.

While job applicants over the last few years have had the luxury of options for jobs and being in a position to push for benefits, she said things were starting to change with the more competitive market.