Connect with us

Markets

New Zealand Unemployment Drops to Lowest Level Since 2008

Published

on

New Zealand Unemployment
  • New Zealand Unemployment Drops to Lowest Level Since 2008

Unemployment has fallen below 5 percent for the first time in nearly eight years thanks to the growing economy, but it is still not translating into booming wages.

Official figures show the unemployment rate declined to 4.9 percent in the three months to September, or 128,000 people, the lowest rate since December 2008.

That compares to a revised 5 percent jobless rate in the previous June quarter.

“The number of people employed in New Zealand was up 35,000, or 1.4 percent, in the September 2016 quarter,” Statistics New Zealand labour and income statistics manager Mark Gordon said.

“This strong growth in employment, coupled with few unemployed people, pushed the unemployment rate below 5 percent for the first time in nearly eight years.”

Employment outpaced the growth in the number of people entering the workforce, which rose 0.7 percent, or 24,000, to 3.379 million.

Unemployment fell by only 3000.

More than half the quarterly employment growth was in the Auckland region and Otago accounted for a fifth.

More people were employed in rental, hiring and real estate services, while construction also increased, which offset a decline in manufacturing jobs.

The labour force participation rate hit an all-time high of 70.1 percent, but changes to the survey means comparisons with past figures can’t be made.

The under-utilisation rate, which measures those wanting work or more hours, fell to 12.2 percent.

Economists are still unsure about the actual strength of the labour market, given Statistics New Zealand has revamped the way it analyses the data.

Westpac senior economist Anne Boniface said the way the numbers were now being compiled made comparisons with historical data more difficult.

But she said the faster-growing economy was encouraging more firms to hire.

“Usually where we see stronger activity in economy [is in] … some of the service sectors that have benefited from the boom in tourism in particular, so retail and food service industries have seen solid job growth,” Ms Boniface said.

Wage growth muted

Wage growth remained subdued. Annual wage inflation edged up to 1.6 percent, with private sector pay at 1.6 percent, and public sector pay up to 1.7 percent.

That was the first time public sector wage growth had exceeded private sector in six years, which Statistics New Zealand said was influenced by pay deals for nurses, primary teachers and the police.

Inflation stood at 0.2 percent.

Wage growth in the construction industry remained strong at 2.1 percent, driven by increases to tradespeople like carpenters and plumbers.

Finance Minister Bill English said, with inflation near zero, workers’ pay packets were buying more.

Mr English said employment growth was touching most parts of the country, reflecting the resilience of the rural sector.

“One aspect of the statistics which is particularly pleasing is the falling unemployment in many regions, particularly the West Coast, Manawatu-Whanganui, Northland and the Waikato, with a number of regions having unemployment under 5 percent and some even under 4 percent.”

Auckland the ‘place to be’ for trades workers

Fewer women were out of work, and while Māori and Pasifika unemployment remained high, it had declined.

In some sectors, like construction, workers are experiencing fatter pay packets.

The industry co-ordinator for infrastructure at the E tū union, Ron Angel, said Auckland was the place to be for the likes of carpenters, labourers, painters, plumbers and electricians.

“We’re hearing stories of 5, 10, 15 percent wage growth between when people are putting in the prices for contracts and when they actually get onto the job.” Mr Angel said.

“The pressure’s on employers to keep workers.

“So, in the interim the employees are starting to say, ‘Well, I can get another couple of dollars an hour down the road’, so they’re [employers] having to pay $3 an hour more, just to keep them to be able to do the jobs they’ve already won.”

Council of Trade Unions spokesperson Bill Rosenberg was not so upbeat.

“What we’re seeing is partly a shift in the economy towards low wage jobs,” Dr Rosenberg said.

“Shifting towards industries like accommodation, food services, retail trade where pay is very low, often close to the minimum wage. This is really the opposite direction that we really want to see.”

Dr Rosenberg said the government’s focus should be on high value, decent jobs, which would be better for the economy and future growth.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Published

on

Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

Continue Reading

Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Published

on

Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

Continue Reading

Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Published

on

oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

Continue Reading

Trending