Another 26,000 'will be unemployed' before peak reached
Another 26,000 'will be unemployed' before peak reached
It's not just the public sector feeling the pain - and there is more to come across the country, economists say.
Surely all these people losing decent paying jobs will have no impact on the economy right? Definitely not a recession right?
March quarter data from Stats NZ showed an increase in the unemployment rate, from 4 percent in December to 4.3 percent. It said 134,000 people were now unemployed.
If 134k is 4.3% then 4% is about 125k people. So 9k people lost their jobs since December and another 26k to go?
Is this the difference in roles or the total redundancies (a certain percentage of people made redundant will go into a new role, some of which would not have had someone in it before)?
Maybe they expect a peak of about 150k people unemployed?
Sounds like they expect it to peak at about 4.8% if my maths is right? Historically, that's still pretty low.
He said the number of people on the JobSeeker benefit had been trending higher since the start of 2023. In March there were 187,986 people receiving this benefit, up from 131,721 in March 2019 and 168,498 last year.
I get lost with the new benefits. Are the 187k people on Jobseeker not all considered "unemployed"? Is this a case of some people with part time work (underemployed) being counted in one but not the other?
I get lost with the new benefits. Are the 187k people on Jobseeker not all considered "unemployed"? Is this a case of some people with part time work (underemployed) being counted in one but not the other?
Yeah the unemployment rate and benefit rates don't match up for a whole bunch of reasons.
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you're only counted as unemployed if you're actively looking for work. Otherwise you're not part of the labour force
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Not all unemployed people will be on jobseeker. If you have a working partner/spouse you're not usually eligible, for example.
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'Jobseeker' rolled up all the old benefits into one, so there are people with disabilities who can't work at all counted in those figures.
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You can work a limited number of hours while on jobseeker before it starts to abate.
The underutilisation rate is arguably a better measure, as it includes unemployed but also people who want more work but can't find it. It's potentially a 'truer' measure to compare to when, as you say, 4.8% unemployment is relatively low compared to other times in the past. You can work a couple of hours a week and you don't show up in the unemployment stats, but it hasn't always been counted that way.
‘Jobseeker’ rolled up all the old benefits into one, so there are people with disabilities who can’t work at all counted in those figures.
Yeah this is the benefit confusion I alluded to, and I was wondering if this was the case. I think things like what I think was called the Sickness Benefit is now part of the Jobseeker support benefit, despite having no requirement to look for work.
The underutilisation rate is arguably a better measure, as it includes unemployed but also people who want more work but can’t find it.
Digging into this, the unemployment rate went from 3.4% to 4.3% between March 2023 and March 2024.
The underutilisation rate went from 9.1% to 11.2% in the same time period.
I haven't managed to find data from before 2010 for underutilisation so it's hard to see the historically normal level.
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The article says "will be unemployed" meaning they are going to get fired or laid off or whatever the term they are using these days.
Sounds like they expect it to peak at about 4.8% if my maths is right? Historically, that’s still pretty low.
I don't know. Usually mass layoffs have carry over to the rest of the economy. All the businesses serving those government employees are probably also going to downsize somewhat. Some may even go out of business who knows.
I get lost with the new benefits. Are the 187k people on Jobseeker not all considered “unemployed”?
Most likely not everybody who is unemployed is getting a benefit so the number unemployed should be higher than those seeking jobseeker benefits.
I don’t know. Usually mass layoffs have carry over to the rest of the economy. All the businesses serving those government employees are probably also going to downsize somewhat. Some may even go out of business who knows.
But if these are in addition to the 26k, then the 26k wouldn't be the peak?
Most likely not everybody who is unemployed is getting a benefit so the number unemployed should be higher than those seeking jobseeker benefits.
The article says in March 134k people are unemployed and 187k people are on the Jobseeker benefit.
Note that "unemployed" isn't everyone who doesn't have a job, you have to be looking for work to be considered. So for example, you generally don't count a stay-at-home Dad whose partner works to support the family.
I can't remember where I read it but from what I understood of the article a common outcome from central banks ramping up interest to dampen the economy is that they inevitably overshoot and make things much worse than they needed to. This can then result in such a bad down turn that in the long run doing nothing & letting inflation play itself out may have been better than intervening.
Its not yet apparent in the headline numbers so much; but you don't need to see too many more reports of major companies reducing earnings outlooks and anecdotal words of caution from friends & family before it starts to look like we're beyond technical and into an actual recession.
What's the difference between a technical recession or an actual recession. Words are supposed to have meanings and recession is a well defined term with globally accepted measurement metrics.
If we are technically in a recession it means we are in a recession.
The difference is the duration; and I would guess its done due to the vagaries of measurement as much as anything because its common for the initial numbers to end up being revised later. So 2 consecutive quarters of negative GDP growth is a technical recession, and beyond that you're in a real recession.
But the cynic in me will always suggest that while economists sometimes seem to think what they're doing is a hard science, a lot of it seems to be more about the feels and what is expedient to their political view point.
Then on top of that, over the years i've read various arguments that GDP is kinda a piss poor measure of the economy anyway, and there's more holistic ways of measuring how things are going. This article sums up a bunch of the opinions about it, of whose Craig Renney's is the one I probably put more stock in - along with those suggesting using the Sahm Rule given it looks at employment which is probably a better measure for how actual people are getting along.