New Zealand Unemployment Q1 2020

New Zealand

New Zealand: Unemployment rises moderately ahead of Covid-19 lockdown in Q1

May 6, 2020

The seasonally-adjusted unemployment rate rose to 4.2% in Q1 from 4.0% in the previous quarter. The reading was slightly below market expectations of a 4.3% unemployment rate, and reflected both a limited increase in the number of unemployed people and a rise in the labor force participation rate, both contributing to the uptick in the unemployment rate. Although Q1’s figures paint an overall positive picture, Q2 is projected to be an especially dire period for the labor market due to lockdown measures.

Meanwhile, the underutilization rate—which includes both unemployment and underemployment—rose from 10.0% in Q4 to 10.4% in Q1, signaling some increase in the labor market’s untapped capacity. Meanwhile, private sector wages rose 2.5% in Q1 on a year-on-year basis, marginally above Q4’s 2.4% upturn.

FocusEconomics panelists expect the unemployment rate to average 7.4% in 2020, which is unchanged from last month’s forecast, and 7.3% in 2021.

Author: Massimo Bassetti, Economist

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New Zealand Unemployment Chart

New Zealand Unemployment Q1  20 20

Note: Quarter-on-quarter seasonally adjusted and annual variation of retail sales in %.
Source: Statistics New Zealand and FocusEconomics calculations.

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