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Labour Market Statistics: December 2014 quarter
Embargoed until 10:45am  –  04 February 2015
Commentary

We have combined the Household Labour Force Survey (HLFS), Quarterly Employment Survey (QES), and Labour Cost Index (LCI) information releases into one single joint Labour Market Statistics release.

Unemployment rate rises to 5.7 percent as labour force grows

In seasonally adjusted terms, the unemployment rate increased to 5.7 percent in the December 2014 quarter – up 0.3 percentage points from the September 2014 quarter. The rise reflected 8,000 more people being unemployed over the quarter.

In the year to the December 2014 quarter, the unemployment rate fell 0.3 percentage points – from 6.0 percent.

More men and women looking for work

The rise in the number of people unemployed over the latest quarter came from both more men and women being unemployed. In seasonally adjusted terms, the number of unemployed men rose by 5,000 (to 66,000) and the number of unemployed women rose by 3,000 (to 77,000).

Over the same period, the unemployment rate for men increased 0.4 percentage points (to 5.0 percent) and for women it increased 0.2 percentage points to (6.5 percent).

Labour force participation highest on record

In the December 2014 quarter, the labour force grew by 36,000 people in seasonally adjusted terms – the largest level increase since the series began in March 1986. As a result, the labour force participation rate rose 0.7 percentage points – to 69.7 percent over the quarter. This is the highest participation rate since the series began, surpassing the revised previous high of 69.3 percent in the March 2014 quarter.

The rise in the labour force reflected continued population growth and fewer people not being in the labour force. Over the latest quarter, the strong rise in employment (up 28,000 people) did not keep up with the record number of people entering the labour force. Therefore, the number of people unemployed, and the unemployment rate, also increased.

Over the year, the 20–34 and 65+ age groups contributed the most to the annual growth in the labour force (up 76,000 people in seasonally adjusted terms). The increases for these groups was consistent with a rise in the corresponding working-age population age groups. High net migration for the 20–34-year age groups contributed to the growing population.

See International Travel and Migration: December 2014 for more detailed information on migration. 

Employment growth continues to outpace population growth over the year

In the year to the December 2014 quarter, the number of people employed increased by 80,000 (3.5 percent), in seasonally adjusted terms. Employment growth was stronger than in the September 2014 quarter, which showed annual growth of 3.2 percent.

The number of filled jobs reported by businesses from the QES increased 2.5 percent in the year to the December 2014 quarter. Employment in HLFS was stronger due to growth in jobs beyond the coverage of the QES, particularly in self-employment.

Over the latest quarter, the number of people employed in the HLFS grew at a faster rate than the working-age population, up 1.2 percent and 0.5 percent respectively. This resulted in the employment rate increasing 0.4 percentage points (to 65.7 percent).

Employment outcomes for women continue to improve

Over the latest quarter, the employment rate for women increased 0.7 percentage points – to reach 60.4 percent. This is the highest level since the series began in March 1986, surpassing the previous record of 60.0 percent in the December 2008 quarter. The employment rate for women also increased over the year (up 1.4 percentage points).

The employment rate for men also increased, up 0.2 percentage points over the quarter and 0.6 percentage points over the year, to reach 71.2 percent.

More people in full-time and part-time employment

More people were working full time in the December 2014 quarter than at the same time in 2013. Full-time employment increased 3.8 percent over the year and 1.0 percent over the quarter. Full-time employment has now risen for nine quarters in a row.

In line with the increase in full-time employment, the number of full-time jobs reported by businesses from the QES increased 3.7 percent in the year to the December quarter.

The number of people working part time also increased – up 2.5 percent over the year and 2.9 percent over the quarter. The number of part-time jobs reported by businesses from the QES increased 1.8 percent over the year.

Annual employment growth in construction continues

Nationally, 25,700 more people were employed in construction over the year, accounting for 32 percent of the national growth in employment. Construction in Canterbury and Auckland remained strong, with 9,600 more people employed in Canterbury and 7,200 more in Auckland since the December 2013 quarter.

There was also employment growth outside the construction industry. More people were employed in the arts, recreation, and other services industry (up 19,000 people) and the public administration and safety industry (up 11,800 people).

The largest contributions to the rise in filled jobs over the year, reported by businesses from the QES came from:

  • accommodation and food services
  • retail trade
  • construction.

While the QES is better designed to give industry estimates, 26 percent of growth in the construction industry over the year was due to self-employment. The majority of self-employment is out of scope of the QES and therefore not reflected in growth in filled jobs. However, it is accounted for in HLFS.

Employment growth seen in a number of regions

Over the year to the December 2014 quarter, the largest contributors to employment growth were Auckland (up 22,300 people), Waikato (up 17,400 people), Canterbury (up 15,800 people), and Bay of Plenty (up 15,600 people). However, only the last movement was statistically significant.

While Canterbury remains a key contributor, employment growth in Canterbury eased in the year to the December 2014 quarter. Canterbury accounted for 19 percent of national annual growth, compared with almost half in the year to the September 2014 quarter.

The slower growth in Canterbury came after a sharp rise in the number of people employed between the September and December quarters in 2013, compared with the same period in 2014. Therefore, while the number of people employed in Canterbury remained high, the rate of annual growth eased between the December 2013 and December 2014 quarters.

NEET rate for women lowest since series began

The overall seasonally adjusted NEET (not in employment, education, or training) rate has remained unchanged in the December 2014 quarter at 11.3 percent. However, the NEET rate for women fell 1.6 percentage points (to 12.6 percent) over the quarter – the lowest rate since the series began in March 2004. In contrast, the NEET rate for men rose 1.6 percentage points (to 10.1 percent).

Outcomes improve for Māori

Employment for Māori increased by 10,400 people over the year to the December 2014 quarter, resulting in an increase in the employment rate to 60.2 percent.

 Labour market statistics for Māori

Dec 2014 quarter Annual change
(000)  Percent
Employed 276.0 +3.9
Unemployed 37.5 -3.7
  Percent Percentage points 
Employment rate 60.2 +1.3
Unemployment rate 12.0 -0.8
Labour force participation rate  68.4 +0.9

Wage growth remains steady

In the year to the December 2014 quarter:

  • The labour cost index (LCI) increased 1.8 percent. This measure of wage inflation reflects changes in the rates that employers pay to have the same job done to the same standard.
  • The unadjusted LCI increased 2.6 percent. This reflects quality change within occupations (such as performance-related increases) as well as wage inflation.
  • Average ordinary-time hourly earnings increased 2.6 percent. This measures the average hourly wage bill across all jobs in the surveyed industries.

Private and public sector wage rates

In the year to the December 2014 quarter, private sector salary and wage rates (including overtime) increased 1.8 percent, compared with 1.2 percent for the public sector. This follows increases of 1.9 percent for the private sector and 1.0 percent for the public sector in the year to the September 2014 quarter.

Rounding influenced the latest quarter's results for private and public sector salary and wage rates. Based on unrounded index numbers, annual growth in private sector wage rates remained unchanged over the quarter. 

See data quality for unrounded figures.

Higher proportion of positions have pay increases

In the year to the December 2014 quarter, 59 percent of the salary and ordinary time wage rates that employers pay (to have the same job done to the same standard) increased. This is the highest proportion since the March 2009 quarter, when 60 percent of all salary and ordinary wage rates increased.

While more positions had pay increases in the year to the December 2014 quarter, the average size of pay increases fell. Of those that increased, the mean increase was 3.2 percent, down from 3.3 percent in the year to the September 2014 quarter.

Proportion increasing

Wage growth remains above consumer price inflation

The prices of goods and services bought by households, as measured by the consumers price index (CPI), increased 0.8 percent in the year to the December 2014 quarter.

See Consumers Price Index: December 2014 quarter for more details.

The LCI salary and wage rates (including overtime) increased 1.8 percent over the same period. The gap between wage rates and consumer inflation increased in the latest quarter, as CPI inflation weakened.

GST rose from 12.5 percent to 15 percent on 1 October 2010. This affected annual CPI movements from the December 2010 quarter to the September 2011 quarter. The following graph shows what the annual CPI percentage increases would be if prices collected from the December 2010 quarter to the September 2011 quarter were processed with GST of 12.5 percent for goods and services that are subject to GST.

HLFS estimates to be updated shortly

Following each Census of Population and Dwellings, we rebase estimates from the HLFS – using information from the latest census. This population rebase occurs once new national population estimates are released. These are the source of the HLFS working-age population estimates.

We are completing this work and anticipate the HLFS population rebase will be released in late March.

For the coming population rebase, we are improving our estimation methodology by implementing regional population benchmarks. The HLFS currently applies two sets of benchmarks: sex by five-year age bands, and Māori by sex for the 15–29 and 30-years-and-over age groups. The new benchmarks will be the subnational working-age population estimates for the regional council areas currently published in the HLFS.

For more detailed data about labour market statistics, see the Excel tables in the 'Downloads' box.

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