Workers are now heading (or are forced) for the exits as demand wanes. As StatsNZ comments “From the survey, some of the largest increases in those not in the labour force over the year came from people mainly engaged in leisure activities, studying or training, and taking care of themselves due to their own sickness, illness, injury, or disability.” We’ve heard a lot about voluntary redundancies, migrants struggling to find work, and some going back to Uni and other reasons. The fall in participation was concentrated within the younger cohort (15-24 years). Almost 60k more people were classified as ‘not in the labour force’ over the past year. So don’t be fooled by the stronger headline print (unemployment rate). Worker demand is waning, with employment contracting 0.5% over the quarter, and down 0.4% on the year – the first annual decline since September 2012, and the deepest since the GFC. The labour market has more catch up to do. We still see the unemployment rate on track to exceed 5% in the coming year – peeling further and further away from the 3.2% low.
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