NZ Unemployment up but is it all bad?

Although the recent figures for the rate of unemployment in New Zealand have increased from 6.4% to 6.7% there are some interesting statistics with regards to participation rates and employment rates.

The employment rate increased 64.2% of the total working-age population, from 63.9%. The BNZ highlighted the following:

1. The unemployment rate hasn’t been affected too greatly during the last 4 years as NZ nears the bottom of the economic cycle;
2. NZ employment rate has settled well above that seen following the 1998 recession and significantly above that which was experienced following the early-1990s recession;
3. New Zealand’s early-1990s employment rate is about where a lot of the troubled developed-world economies now find themselves – Greece, Spain, and even the US. See graph below;
4. New Zealand, in contrast now has one of the highest employment rates in the world (testimony to its relatively high participation rate, coupled with a high rate of placement into jobs).

With firms indicating that it is their intention to take on more staff the BNZ estimate that the unemployment rate will be:

6.2% Dec 2012
5.6% Dec 2013

One wonders where the NAIRU is? The rate of unemployment when inflation is stable – maybe 4%. This is much lower than that of the US – see Beveridge Curve postings

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