Our take on the latest Labour market statistics (Wed 3 Feb 2021)
Unemployment rate falls to 4.9%
Underutilisation rate falls to 11.9%
17,000 more people employed in the December 2020 quarter
The key numbers...
- The unemployment rate fell to 4.9%pa in the December 2020 quarter, and there were 10,000 fewer unemployed people than in September (both figures seasonally adjusted).
- Over the December 2020 quarter, Stats NZ estimates that employment rose by a seasonally adjusted 17,000 jobs, with a 1.2% rise in the number of full-time jobs outweighing a 1.8% fall in the number of part-time jobs.
- The under-utilisation rate fell to 11.9% (seasonally adjusted), as falls in under-employment, unemployment, and available potential job seekers offset a slight rise in unavailable job seekers.
- Total hours worked rose a seasonally adjusted 4.5% in the December 2020 quarter, and are now 2.7% higher than March’s pre-COVID level.
Turning the corner?
Number of unemployed (seasonally adjusted)
...and our reaction
- The fall in the unemployment rate in the December quarter comes as a welcome surprise, with most forecasters expecting a slight rise.
- In the December 2020 quarter, the labour market improved across almost every indicator with employment up, working hours up, wages up, and the underutilisation rate down. We are not back to pre-COVID levels yet, but we are heading in the right direction.
- The December results support our increasingly optimistic outlook for the New Zealand economy. There remains the potential for further job losses to occur in the tourism sector as the effects of our closed borders continues to bite. But any redundancies in tourism will more than likely be offset by job gains in stronger-performing sectors such as health, construction, education, and public administration.
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