Statistics NZ has issued a press release with the shock revelation that unemployment in New Zealand rose in the last quarter to another 10 year high undoing almost all of the improvement seen in the previous quarter.

“In seasonally adjusted terms, New Zealand’s unemployment rate rose from 6.0 percent to 6.8 percent during the June 2010 quarter, Statistics New Zealand said today. This rise unwinds much of the drop in unemployment seen in the March 2010 quarter, and indicates a period of volatility in the labour market.

Unemployment rose 19,000 during the June 2010 quarter to reach 159,000, marked by an increase in unemployed males. As with the fall in the March quarter’s unemployment, the rise this quarter was largely unexpected, and reflected movements among younger males…”

The unexpected news sent the NZ dollar tumbling as investors bailed out. The release indicated that the labour market was still adjusting to the economic climate and finished with

“Employment decreased by 6,000 during the June 2010 quarter, following a 21,000 increase last quarter. Part-time work fell, while full-time employment rose. Consistent with the rise in full-time work, both usual and actual hours worked increased during the quarter, indicating that those in work are working more hours.

The Household Labour Force Survey results are based on a representative sample of 15,000 households throughout New Zealand. The survey is designed to produce estimates of the numbers of people employed, unemployed, and not in the labour force.”    Read the full press release on Scoop

Together with immigration numbers stalling and turning negative, downward pressure on house prices, a recent rise in the OCR to 3%  putting mortgage repayments at around 6.5%, NZ Telecom being put on Credit Watch by Standard and Poor and Kiwis feeling that their country has become too expensive (NZ a giant rip off?  TravelMSN) , it all adds up to more pain as the gap between New Zealand and Australia widens ever further:

Interest.co.nz had this to say about Australia, adding that outward migration across the Tasman was increasing:

Across the Tasman, Australia reported a record monthly trade surplus for June of A$3.8 billion. Australian mining exports rose 11% for the month as demand from China continues to keep prices high and shipments heavy. Australian exports have risen 42% in the last 3 months and will no doubt keep wages growth strong. New Zealand migration to Australia has picked up in recent months.

“Recovery Stalling“

Earlier last month we highlighted that the recovery of the economy was stalling.

New Zealand Institute of Economic Research’s chief economist Shamubeel Eaqub said in a quarterly survey of business opinion “The economy had “yet again” failed to deliver on expectations of a stronger recovery, with some weakening of export activity underpinning ongoing weakness in the domestic economy, where retailers’ previously strong expectations were now falling and becoming more realistic, said Eaqub. “The household sector is far more cautious than at any stage that we’ve seen in the last decade or so.“

The latest unemployment figures would seem to suggest that NZ isn’t out of the woods yet.
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