Home > Labour Market, Unemployment > NZ Unemployment up but is it all bad?

NZ Unemployment up but is it all bad?

Although the recent figures for the rate of unemployment in New Zealand have increased from 6.4% to 6.7% there are some interesting statistics with regards to participation rates and employment rates.

The employment rate increased 64.2% of the total working-age population, from 63.9%. The BNZ highlighted the following:

1. The unemployment rate hasn’t been affected too greatly during the last 4 years as NZ nears the bottom of the economic cycle;
2. NZ employment rate has settled well above that seen following the 1998 recession and significantly above that which was experienced following the early-1990s recession;
3. New Zealand’s early-1990s employment rate is about where a lot of the troubled developed-world economies now find themselves – Greece, Spain, and even the US. See graph below;
4. New Zealand, in contrast now has one of the highest employment rates in the world (testimony to its relatively high participation rate, coupled with a high rate of placement into jobs).

With firms indicating that it is their intention to take on more staff the BNZ estimate that the unemployment rate will be:

6.2% Dec 2012
5.6% Dec 2013

One wonders where the NAIRU is? The rate of unemployment when inflation is stable – maybe 4%. This is much lower than that of the US – see Beveridge Curve postings

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