Unemployment Rate At 4.6 Percent

Almost half the annual growth in unemployment and underutilisation came from young people, while wage growth remained strongest in the public sector, according to figures released by Stats NZ today.

In the June 2024 quarter:

• unemployment rate was 4.6 percent
• underutilisation rate was 11.8 percent
• annual wage inflation was 4.3 percent
• average ordinary time hourly earnings rose 5.0 percent annually to $41.52.

The seasonally adjusted unemployment rate, as measured by the Household Labour Force Survey, was 4.6 percent in the June 2024 quarter, compared with 4.4 percent last quarter and 3.6 percent in the June 2023 quarter.

Over the year, unemployment rose by 33,000 to 143,000.

"Unemployment has been increasing since 2022, leaving the current quarter's unemployment rate the highest since March 2021," labour market manager Deb Brunning said.

"Recent rises in unemployment align with other economic indicators, including an increasing number of benefit recipients, a decreasing number of job vacancies, and declining GDP (gross domestic product) per capita."

Underutilisation is a broad measure of untapped labour market capacity that includes unemployed and underemployed people, along with the potential labour force.

The seasonally adjusted underutilisation rate was 11.8 percent in the June 2024 quarter, up from 11.2 percent last quarter and 9.9 percent a year ago. Over the year, the total number of underutilised people rose by 66,000 to 377,000.

Increasing youth unemployment and underutilisation

"Young people accounted for almost half the increase in unemployment and underutilisation between the June 2023 and 2024 quarters," Brunning said.

Annually, unemployment for people aged 15 to 24 years rose 14,400 and underutilisation rose 29,300 (not seasonally adjusted).

In the June 2024 quarter, compared with the June 2023 quarter, youth unemployment rates were:

• 20.7 percent, up from 15.1 percent, for 15 to 19-year-olds
• 8.0 percent, up from 5.8 percent, for 20 to 24-year-olds.

Annually, the seasonally adjusted NEET rate (the proportion of young people not in employment, education, or training) increased from 11.7 percent to 12.8 percent.

Public sector wage inflation reaches new high

Labour cost index (LCI) wage inflation in the public sector rose to a series high of 6.9 percent annually. Public sector average ordinary time hourly earnings in the Quarterly Employment Survey (QES) increased 7.9 percent to $49.56.

"The effects of pay increases for some health workers, along with school therapists and early-childhood education staff, have all come through in public sector wage growth this quarter, in addition to other settlements seen over the year," Brunning said.

Average hourly earnings up 5.2 percent annually covers increasing wages in the education and training, and health care and social assistance industries from 2023 to the March 2024 quarter in more detail.

Overall, annual wage cost inflation was 4.3 percent in the June 2024 quarter, while average ordinary time hourly earnings increased 5.0 percent annually to $41.52.