I don’t like to do this, but I’m getting a bit sick of bank commentary following the HLFS release. This is specifically from ANZ’s weekly report this morning:
While employment tumbled 1.1 percent in Q1, the unemployment rate “only” rose to 5.0
percent as a number of workers leaving the labour force limited its rise
- The participation rate fell after SPIKING LAST QUARTER. It is still up on a year earlier. The employment and PR series are notoriously volatile while unemployment is a fairly stable and reliable indicator – hence it is bull to say that this data is telling us that unemployment only didn’t rise further because people are leaving the labour market. If it was fine for you guys to dismiss the lift in the PR in December (when anyone could have said unemployment only went up because participation rose) you should dismiss the fall now – you can’t cut it both ways.
- Stop using inverted comma’s when the data doesn’t suit your story. The fact is that this unemployment rate was a hell of a lot better than any of us economists were expecting. We should accept that, and try to understand it – instead of belting it with a stick until it fits our specific stories.
- Also, 5% is an only – there is no need for inverted commas. 5% is about New Zealand’s neutral rate – the level of unemployment we expect over the medium term. After 15 months of recession I would expect unemployment to be higher than that – as a result this is a significant positive for the country.