Labour market steady (for now)
It will be a few weeks (4 November) before the next official set of labour market indicators is released by Statistics New Zealand, but unofficial datasets indicate that employment levels have remained fairly steady, despite COVID-19. However, there are several large clouds on the horizon.
When it comes to assessing the state of the labour market in New Zealand, the ‘go to’ datasets are from the Household Labour Force Survey (HLFS) and the Quarterly Employment Survey (QES). But the problem with these sources is that the findings are not available until roughly five weeks after the quarter they relate to has finished. The data for the September 2020 quarter will not be released until the first week in November. And, obviously, there is a relatively long interval between releases.
Partly to compensate for these problems, and to enable closer monitoring during the COVID-19 crisis, Statistics New Zealand has recently started publishing weekly and monthly labour market indicators (see here). The indicators are drawn from different sources, but they cover the number of jobs, earnings and job advertisements.
The indicator that stands out is that for job adverts. This indicator reveals a very large decline, and this bodes poorly for future employment.
A selection of the indicators is shown in the table below. To remove the effect of seasonal variations, the table compares the readings for August this year with those for August last year. Despite COVID, three of the indicators actually show slight improvements, but the indicator that stands out is that for job adverts. This indicator reveals a very large decline, and this bodes poorly for future employment.
| August 2019 | August 2020 | |
|---|---|---|
| Monthly filed jobs | 2.15 million | 2.19 million |
| Index of new job online adverts | 152.03 | 102.67 |
| Total earnings, all industries | $10.83 billion | $10.93 billion |
| Median weekly earnings | $1004.8 | $1035.0 |
The job adverts indicator reflects employers’ lack of confidence about their ability to offer employment opportunities, and this sentiment is also evident in major business surveys, such as the ANZ’s Business Outlook and Business New Zealand’s Performance of Manufacturing and Performance of Services Indexes.
It should also be noted that the positive indicators in the table have largely been the result of the Wage Subsidy scheme, which was still supporting around 370,000 jobs at the end of August. This number has been dropping rapidly in recent weeks, but there will still be some jobs supported by the scheme until late October or early November.