A shock jump in unemployment has pushed the number of New Zealanders who are officially "jobless" up to a record of almost 300,000 - and it would have been worse without the first signs of recovery in Canterbury.
Statistics NZ says unemployment rose by 19,000 to 170,100 in the year to September, pushing the unemployment rate up from 6.6 per cent to 7.3 per cent, the highest since 1999.
A further 124,900 were classed as "jobless" but not "unemployed" because they were either seeking work but not available to work immediately or available but not looking for work, or not looking beyond scanning newspaper advertisements, or "discouraged" from looking.
The total of 294,900 jobless is the highest since records began in 1986 and represents 8.4 per cent of all adults aged 15 and over, the worst jobless rate since 1993.
The figures were much worse than most economists expected and came despite first signs of jobs being generated from the Christchurch rebuild after last year's devastating quake. Employment rose by 2.9 per cent in Canterbury in the year to September, but fell 2 per cent in Auckland.
Auckland now has the country's third-worst unemployment rate of 8.6 per cent, behind Northland (10 per cent) and Gisborne/Hawkes Bay (8.9 per cent). Canterbury unemployment eased slightly to 5.2 per cent.
Labour employment spokesman Su'a William Sio said unemployment rates for Maori and Pacific people were worse than average. The European unemployment rate rose from 4.9 per cent a year ago to 5.4 per cent, but the Maori rate jumped from 13.1 per cent to 15.1 per cent and the Pacific rate from 14.4 per cent to 15.6 per cent.
Finance Minister Bill English said the figures reflected "economic head-winds around the world". "The fact is we have the Christchurch rebuild. The infrastructure unit from Christchurch is out trying to recruit 1000 people around the country right now, so for people who are looking for jobs that is the best opportunity."
Infometrics economist Matthew Nolan said the jump in Auckland unemployment was surprising given signs the local building industry and other sectors had begun to turn the corner. But he said the gloomy national picture reflected falling prices for most of our export commodities most of this year and the high New Zealand dollar, which had priced local products out of some overseas markets.
Fulltime employment dropped by 16,800 (1 per cent) in the past year, while part-time workers rose by 18,400 (3.6 per cent). "It's strange to see fulltime employment being cut at this point in the cycle, so that is quite a bad sign," Mr Nolan said.
However, unemployment probably wouldn't get any worse and should start falling next year, though only very slowly. "We can't see it get-ting below 6.5 per cent before 2014."
By contrast, Australia's unemployment rate was only 5.1 per cent and Infometrics believed it wouldn't rise above 5.5 per cent.
"As long as that is the case, and as long as there is demand for skilled labour there, which there always is, there's a choice for people who can't get work here to go and try their luck."
Engineering, Printing and Manufacturing Union national secretary Bill Newson said the figures resulted from the Government's management of the economy, listing Dynamic Controls, Rakon and Solid Energy's Spring Creek among businesses affected by recent mass redundancies.
"The strength of the dollar and its extreme volatility is punishing our export manufacturing sector, while the Government refuses to come up with a strategy to support and promote manufacturing firms."