Unemployment rate jumps

Employment minister Paula Bennett has admitted the sharp rise in general unemployment  is ''higher than we wanted it to be.''

Jobless figures rose 19,000 during the June quarter to 159,000 - an increase from 6 per cent to 6.8 per cent, higher than economists had expected.

The Labour Party, the Greens and trade unions are blaming the Government for the jump.

Ms Bennett said the rise was ''absolutely'' a disappointment. But she said the rate was lower than the 7.1 per cent recorded for December.

''No-one wants to see a jump in unemployment. And I think that we have got to put it in perspective - where it's 7.1 per cent in December last year and now it's 6.8...We'd sort of see it as an evening out now.''

She said it was disappointing to ''see that there are people out there looking for jobs and are unable to find them right now. I mean it is bump coming out of such a recession as we did.''

Employers were extending existing workers hours rather than creating new jobs, she said.

''What they are doing is extending peoples hours. So what they did do, anecdotally last year, was shorten peoples hours instead of laying them off. They are now extending those hours again. That affects them taking on other workers and part time workers.''

Although John Key said last March there would be an ''aggressive recovery,'' she admitted: ''Aggressive isn't a word I'd use, but I would say we are coming out of it. We've got a wee way to go.''

She said employment benefit figures had also gone up.

''In July they always go up, it's seasonal differences but they are not going up at a high percentage. In fact the percentage increase for July is lower than it has been for five years.''

She said for urban Maori employment was ''on the up'' but said those in provincial areas were ''struggling.''

POLITICAL BACKLASH

Labour leader Phil Goff said the figures were a tragedy for those who had lost their jobs.

"This is more evidence that the Government's economic policies are failing," he said.

"Kiwis have had enough of gimmicks like the Jobs Summit and the cycleway - they want action from the Government to get them back into work."

Mr Goff said the Government didn't have a plan to deal with the situation and further inaction would mean prolonged uncertainty over the jobs market.

Green Party co-leader Metiria Turei said the figures were a stark reminder that the Government's policies were taking New Zealand in the wrong direction, and the Council of Trade Unions (CTU) said there was a sense that the economy was stalling.

"The figure of 6.8 percent shows that the recession is not over for many," said CTU secretary Peter Conway.

"The Government is far too complacent about this - jobs are at the heart of any economic recovery."

Mr Conway called on the Government to step up assistance for unemployed people by expanding its employment programmes and bringing forward job-rich infrastructure spending.

THE NUMBERS AND REACTION

Today's rise unwinds much of the drop in unemployment seen in the March 2010 quarter, and indicates a period of volatility in the labour market, Statistics NZ said.

Unemployment rose 19,000 during the June 2010 quarter to reach 159,000, marked by an increase in unemployed males. As with the fall in the March quarter's unemployment, the rise this quarter was largely unexpected, and reflected movements among younger males.

"There have been recent fluctuations in both employment and unemployment, which can occur during periods of major change in the labour market," manager of labour market statistics Peter Gardiner said.

"These movements indicate that the labour market is still adjusting to the changing economic climate."

The New Zealand dollar fell sharply to US72.99 cents, from US73.49 cents just prior to the Statistics New Zealand release.

The ASB said the result contradicts recent growth in economic activity, the lift in employment intentions, as well as the strength in Tuesday's Quarterly Employment Survey full-time-equivalent employees and hours paid.

"Overall, today's data suggests that the recovery in labour demand is more gradual than previously anticipated.  Nonetheless, we remain confident of further improvement, particularly when looking at ongoing growth in hours worked and the trend improvement in full-time employment," said econmist Jane Turner.

"We see today's figures, coupled with further decline in dairy prices, as enough to put the RBNZ on hold later this year for a few months," she said.

"We still expect an OCR increase in September, but put a lower chance on that happening. We now explicitly expect the Rerseve Bank will pause in both October and December, with OCR increases resuming in January."

MAORI UNEMPLOYMENT JUMPS

The latest Maori unemployment figures have horrified Labour and the Maori Party.

While unemployment overall has increased from 6 percent to 6.8 percent in the Household Labour Force Survey, Maori unemployment is up from 14.2 percent to 16.4 percent.

"That means 26,400 Maori are now without jobs - an increase of 3600 since the previous quarter," said Labour's Maori affairs spokesman Parekura Horomia.

"The situation actually is even worse because the unemployment rate is higher in places like the East Coast and the Far North."

Maori Party co-leader Pita Sharples said the Maori unemployment figures were shocking.

"It's terrible, that's about all you can say really," he told reporters.

"It's a reflection of the times, and for many Maori it's last on, first off in any crisis."

Dr Sharples said training opportunities for young Maori would help "but when there are no jobs, there are no jobs".

But he didn't think the situation was hopeless and the Government had created programmes which were helping.

 - with BusinessDay.co.nz

- NZPA