Unemployment hits 4% in New Zealand's December 2023 Quarter

Published 7 February 2024

Time to roll up our sleeves and dive into the latest scoop from Stats NZ about our job market. The numbers are in, and they're stirring up a bit of chatter. NZ's unemployment rate has nudged up to 4% in the December 2023 quarter, just a smidge higher than the 3.9% we were riding on last quarter.

Let's break it down: over the past year, our unemployment rate has inched up by 0.6%, climbing from 3.5% back in December 2022. While the market was expecting about a bigger jump to 4.3%, we've settled at 4% -- not exactly what experts were expecting.

Despite the slight bump in unemployment, the job market is still chugging along. Employment increased 0.4% during the quarter, adding roughly 12,000 jobs to the mix.

ASB Bank expects unemployment to continue its upward journey, but it may not rise by as much as earlier expected, while wage inflation may not moderate as quickly as earlier expected, he added.

“Fourth-quarter figures confirmed that the exceptionally tight NZ labour market is only slowly going off the boil,” ASB Bank senior economist Mark Smith.

The surge in migration over the past year added 124,000 people to the working-age population to a record high of 4.3 million, there's more competition out there than ever before.

The stats

Let's get down to brass tacks with some numbers:

• Unemployment rate: 4.0% (up from 3.9% last quarter)
• Employment growth: up 0.4%
• Underutilisation rate (a measure of slack in the jobs market): rose to 10.7%
• Annual wage growth: 3.9%
• Average hourly earnings: $40.84
• Average weekly earnings for full-time equivalent employees: $1588

Unemployment rates have returned to 2019 levels, following recent historic lows as restricted borders limited increases to labour supply and labour demand remained high.

So, what's the game plan?

It was important to remember that rising unemployment reflected business owners who were struggling and were having to let people go or to close. It's all about adapting, innovating, and rolling with the punches. For our managers, owners and HR, it's time to get creative, whether it's upskilling our teams, exploring new opportunities, or simply lending a hand to those who need it most.