Auckland's prolonged Covid-19 lockdown is starting to bite, despite official figures showing a sharp drop in those out of work, an economist says.
The Employers and Manufacturers Association expects the unemployment rate will bounce back up in the coming months. (File image) Photo: RNZ / Nick Monro
The unemployment rate fell to 3.4 percent in the three months to September, from 4 percent in the previous quarter.
It is a record-equalling low - matching the rate in December 2007 quarter, before the global financial crisis hit.
The number of unemployed people fell by 18,000 over the quarter, while the economy gained 54,000 jobs.
But economist Shamubeel Eaqub said the official figures do not tell the full story.
"We can see the difference between measured and the big increase we've seen in jobseeker [benefit] numbers," he said.
"We've seen employment growth being quite strong in this survey, but much weaker when it comes to tax data.
"We're starting to see some other indicators that are saying things are actually getting pretty hard with the lockdown in Auckland."
Eaqub said Māori and Pasifika, and those working in the hospitality and retail sectors, were likely to be hit hardest by job losses.
The latest Ministry of Social Development figures show there are more than 190,700 people receiving jobseeker support.
That number has been steadily decreasing since mid-September, after a jump when the country went back into alert level 4 in August.
In Auckland, there are more than 64,000 people on jobseeker support - still about 2600 more than the week before the latest lockdown.
But benefit numbers have never returned to their pre-pandemic levels.
Before the first nationwide lockdown in March last year, there were about 145,000 people on jobseeker support.
Employers and Manufacturers Association head of advocacy and strategy Alan McDonald expects the unemployment rate will bounce back up in the coming months, as Auckland businesses continue to struggle with ongoing Covid-19 restrictions.
"What you're seeing is a reflection of where we were three months ago, not where we are now," McDonald said.
"I think in the next one or two rounds of the numbers, we might see a bit of a different story."
But McDonald said this time around, it would not be because people were being made redundant, it would be because businesses were closing.
Those business that could survive were doing everything they could to hang on to their staff, he said.
"If they lose them now, and they need people whenever we get out of these lockdowns, they won't be there.
"They're trying everything they can to keep the people they've got, because it's so hard to find people."
McDonald said the ongoing border restrictions and immigration settings were continuing to hamper the ability of businesses to fill skills shortages and gaps.
He also said more wraparound support was needed for those who continued to struggle to get into stable employment.
Women working in less than ideal conditions - economist
The new unemployment figures mask some key issues in the labour force, including women coming back into less secure work, an economist says.
Official numbers show the jobless rate eased to 3.4 percent for the three months to September, which equals the record low from 14 years ago.
Council of Trade Unions economist Craig Renney said women, who lost jobs more quickly than men during the pandemic, were now working in less than ideal situations.
"They have come back into sorts of work that are part time, fixed term, agency contracting work, which means that they're actually not able to get all of the hours that they want, or they're working in jobs where they don't necessarily have control over the hours that they work in the way that others do."
In contrast for men, the amount of insecure work fell, Renney said.
One of the things he would like to see before people could claim full employment was improvements for the people who were still looking for more work, he said.
Unemployment rates for young people, Māori, and Pasifika were much higher than the general population and needed to improve, Renney said.
