The Finance Minister is bemoaning those who take a glass-half-empty view of the unemployment figures, saying they were still better than forecast.
The unemployment rate has risen to 5.2% in the three months ended June, up from 5.1% in the previous quarter.
Stats NZ figures show unemployment has risen 1.9 percentage points since the June 2022 quarter.
Annual wage growth has slowed to 2.4%, compared to 4.3% in the June 2024 quarter.
The economy shed about 2000 jobs during the quarter and 16,000 jobs over the past 12 months.
There was also an increase in the number of people aged 15 to 24 in education, which Stats NZ said could be due to the current labour market conditions.
Economist notes that unemployed Kiwis who left for Australia are no longer included in our data. (Source: 1News)
Speaking to the figures, Nicola Willis said the “positive news” was a lower rate of unemployment than what was expected.
“Some New Zealanders, particularly in the commentariat, have got themselves into the habit of what I call glass half-empty economics,” she said.
“Today, on the plain facts of the data, is a lower unemployment rate than was being forecast by Treasury at the Budget, that was being forecast by commercial banks, that was being forecast prior to the election.”
Willis said the 16,000 people who had lost their jobs “shouldn’t take it personally” and blamed the previous government.
“What we have inherited is the horrible human aftershock of poor economic management.
“What happens when you let interest rates and inflation get out of control is that it strangles an economy and it strangles job creation.”
She said there were promising signs in the agriculture and tech sectors, and construction would bounce back once the Government’s infrastructure projects got underway.
Labour leader Chris Hipkins said it was the Government’s fault for letting construction jobs fall in the first place.
“The current Government got elected on a platform that they were going to fix the economy, and clearly they’ve made things significantly worse.”
Hipkins said there were 18,000 fewer people working in building and construction than there were at the time of the 2023 election.
“When thousands of people are employed building new state houses, and you stop building state houses, is it any surprise that the number of people working in building and construction goes down?”
Willis rejected that, saying the Government was continuing to build state and social housing.
The Green Party said the Government was forcing people further into hardship and poverty, and then punishing them with benefit sanctions.
“Increasing unemployment to tackle high inflation is a political choice not new to National governments, but this one has shown little concern at throwing tens of thousands of people out of work,” Greens’ employment and social development spokesperson Ricardo Menéndez March said.
On Breakfast, BNZ chief economist Mike Jones gave his thoughts on what was driving unemployment, and when it could get better. (Source: 1News)
“People want to work and there are masses of important projects for people to work on – housing, climate protection, nature regeneration and others.
“The main barrier to people finding work is this Government.”
The tariffs imposed by the United States were likely to have an effect on the economy, Willis said, but Treasury was still forecasting unemployment to fall in the latter part of the year.
rnz.co.nz