Thursday, 9 May 2013

All good news in today's employment data

Everything came up trumps in today's labour market statistics. Seasonally adjusted, employment grew by 12,000 in the March quarter, the employment rate (the share of the workforce in a job) went up a little from 63.3% to 63.5%, the number of hours worked (a good indication of the overall state of activity in the economy) increased by a substantial 3.2%,  and the unemployment rate went down, from 6.8% to 6.2%.

While there's nothing wrong with part-time jobs - they suit a lot of employers and employees -  it was also good news that full-time jobs have been especially strong. And a new measure of the underemployment rate (those "part-time workers who are available and want to work more hours") was also positive: Statistics NZ doesn't have seasonally adjusted numbers for it, so we can't properly compare March '13 with December '12, but compared with a year ago, the numbers underemployed dropped by 9,800 to 83,300, and the underemployment rate dropped from 4.2% to 3.7%.

And if you're especially concerned about youth unemployment, as you should be, the good news kept on coming. Over the past year, the number of unemployed younger people (15-24) dropped by 10,500, explained by a 11,200 drop in the number of 20-24 year olds unemployed. For them, the unemployment rate dropped sharply, from 15.0% to 10.9%. And the seasonally adjusted 'NEET' rate (those aged 15-24 'not in employment, education, or training', or in other words, at a loose end, voluntarily or involuntarily) also dropped, from 14% in the December quarter (and 13.7% a year ago) to 12.5% in this latest March quarter.

The numbers have been flattered by an especially strong labour market in Canterbury (which is what you'd expect), but this is overall an encouraging set of statistics.

In passing, while everyone is used to paying the most attention to the seasonally adjusted numbers - as you normally would - they continue to show quite a lot of volatility, and are showing what look at first glance like big changes in the labour market from one quarter to the next. For example, the seasonally adjusted unemployment rate rose sharply in the September quarter of last year, from 6.8% to 7.3%, dropped back to square one in December (6.8% again), and dropped sharply again this time round, to 6.2%.  It might be genuine, it might be the sort of sampling error that can happen to any statistics, who knows - and, oddly, the Australian monthly jobs numbers are doing the same thing - but currently it's probably better to go by what Stats calls the 'trend' measures rather than the 'seasonally adjusted' ones. These have the advantage of taking out a fair amount of whatever random noise is causing the numbers to jump around: even on a trend basis, however, the same picture emerges of a substantial improvement in the labour market in the March quarter.

Finally, readers might like to know that Stats also includes an international comparison of unemployment rates in these labour market releases. The unemployment rates are 'harmonised', meaning they are workably comparable across countries. How do we stack up against the 34 countries listed?

Reasonably well: our latest unemployment rate (6.2%) is clearly below the OECD average of 8.0%, and we rank equal 11th out of the 34 (an improvement from 14th of 34 in December '12). Top of the heap are Korea (3.3%) and Norway (3.4%), Australia and Germany are doing quite well (5.4%, joint 8th), France (as I've been blogging in recent days) is doing badly (10.8%, ranked 27th), though nowhere near as badly as the 'PIIGS' (Portugal, Ireland, Italy, Greece, Spain). Greece is worst of all (26.4%), and Spain only marginally better (26.3%).

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