About those unemployment numbers…

In my article yesterday, I talked about the unemployment figures falling to a new low of 3.9%. One or two readers asked if the figures were somehow being reported differently, basically just to make them look good. I replied that I had looked out for changes in the way the statistics were reported but had found nothing of note. However, I had to admit that the fall in the number of unemployed did seem surprising, considering the many other factors that are coming into play in the economy at the moment.

I concluded that it was still a hangover from the economic success of the previous government and that hiring decisions take some time to complete, so this particular data takes more time to flow through to the statistical reports than most other economic data.

But then, with a nudge from Cam, I came across this article from Lindsay Mitchell, who questions the unemployment numbers, and her conclusions do make sense.

First, a headline from the Labour market statistics report: quote.

Regional unemployment and underutilisation

In the year to the September 2018 quarter, these regions had significant unemployment rate decreases:

  • Auckland – 3.7 percent (down 0.9 percentage points)
  • Gisborne/Hawke’s Bay – 4.1 percent (down 4.7 percentage points)
  • Manawatu-Wanganui – 3.6 percent (down 1.9 percentage points). end quote.

So Manawatu-Wanganui had a significant unemployment rate decrease. This is good news for a region where unemployment has been high for years. quote.

In the Manawatu-Wanganui region, the unemployment rate between June and Sept 2018  dropped three whole points from 6.6 to 3.6 percent.
This should be reflected in benefit statistics, no?

It isn’t. The number on Jobseeker Support rose.

I checked out the number for the Manawatu-Wanganui region – a different stat which slightly more closely matches the region surveyed in the Household Labour Force Survey (HLFS).

In June 2018 there were 8,352 people on a Jobseeker benefit: in Sept 2018, 8,532. end quote

So what is going on? How can this be, unless a significant number of people have moved into the region? quote.

We can measure unemployment three ways: through the HLFS, through the numbers on unemployment benefit and via the Census. Obviously the last count is too infrequent and time-lags terribly.

Just be aware that the positive HLFS result is not mirrored in the benefit data result.

The HLFS result is probably a facet of the growing working age population and labour force. The denominator is increasing faster than the numerator. But it could also be a ‘rogue’ result. end quote.

The Taxpayers Union is onto this as well. quote.

With unemployment falling to only 3.9 percent, the growth in those receiving jobseeker benefits is a real puzzle, says the New Zealand Taxpayers’ Union.

Taxpayers’ Union Executive Director Jordan Williams says “In the last year, 9000 more people have moved on to the jobseeker benefit. There’s simply no excuse for thousands more people claiming unemployment benefits when unemployment is below 4 percent.”

“Today unemployment figure suggests the Government needs to crack down harder on those receiving jobseeker benefits – to ensure those who are receiving it actually meet eligibility criteria.

“Last month we revealed that more than a third of unemployment and single parent beneficiaries admit to failing on their obligation to seek unemployment, [sic] while one in ten unemployment beneficiaries work full-time. Today’s figures are just more evidence that too often taxpayers are being ripped off and much of the welfare spend is going to those who don’t need it.” end quote.

Well, I have admitted recently to not being much of a statistician, so you may need to draw your own conclusions from this. I cannot reconcile the fact that we have more people on the jobseeker benefit with the fact that unemployment has dropped by almost 0.5%. Of course, we are not comparing apples with apples here, but something still does not seem quite right.

Immigration could be a factor, of course, although immigration numbers are falling.

I think at this stage, with the absence of any conclusive data, I will keep an open mind, and maybe conclude that it is a statistical aberration rather than any actual fudging of the numbers. But it is hard not to come to the conclusion that some manipulation has been done, with jobseeker numbers increasing.

The December quarter results will be interesting. Watch this space.


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

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