On August 6th, it was said that New Zealand's unemployment rate fell to 3.9 per cent which was 11-year low. The number of people in employment increased by more than 21,000 over the three months to June 30, and annual wage growth hit a decade-high of 4.4 per cent. Under a volatile global situation where US-China trade dispute and Brexit continue to add uncertainty, the rising wages and decade-low unemployment cheer the Coalition Government up, especially the Labour party. Finance Minister Grant Robertson said the data showed the Government's economic plan is delivering more jobs and creating a strong underlying economy at a time where there are strong global headwinds.
Although the Coalition Government holds a positive attitude, skepticism on the data exists. Economists had anticipated the rate would rise to 4.3 or 4.4 per cent and had warned of growing slack in the jobs market.ASB (a bank in NZ) chief economist Nick Tuffley said the labour market statistics were much stronger than expected. Meanwhile, he said that “the fall in unemployment essentially reflected a jump in employment without any corresponding response in labour supply", “we’re inclined to take the data with a grain of salt”. According to Reuters’ report, although New Zealand’s jobless rate edged lower, sluggish wage growth and a drop in employment indicated a softer growth outlook, sending the currency sliding. The biggest opposition National is not convinced the data is as rosy as Robertson claims it to be, pointing out that the number of Kiwis on the jobseekers benefit continues to climb. National’s finance spokesman Paul Goldsmith said it was hard to reconcile the drop in unemployment with the increase in people on the jobseekers benefit.
Positive predictions on New Zealand’s economy seems to be unsurely concluded. The Stats NZ figures do show that fewer people are looking for work, however, one of the problems is that the changing number of the labour force and those not in the labour force had not been considered in the unemployment rate that measures the number of people unemployed as a proportion of those in the labour force. The labour force is the number of people of working age (15 years and over) who are working for wages or a salary, working for a family business, or who are unemployed and seeking work. It was found that the number of working-aged population had increased but the number of people not in the labour force had risen as well, which might lead to the rising of the unemployment rate. The increasing costs for a company to employ staffs with wage growth is another problem.
Other data give clues on the sluggish domestic economy in New Zealand. According to Stats NZ, the annual growth of GDP was 2.7% in the March 2019 quarter, at a decreasing trend. It’s also worth noting that after the report, the Reserve Bank of New Zealand makes a decision on reducing interest rates to 1 percent on Wednesday against a backdrop of a cooling domestic economy and rate reductions by global peers. The NZX - the New Zealand’s stock market – was off by just under 2 per cent amid further trade tension between the US and China.
In sum, different persons account for economic data in New Zealand in various ways and they make sense to some extent. Although the party in power welcome the lower unemployment rate and the wage growth, the volatile global situation and cooling domestic economy may challenge New Zealand’s development.
张梦迪/厦门大学新西兰研究中心