KEY POINTS:
Unemployment is climbing but the latest jobs figures also indicate employers are preferring to cut hours than shed staff, if they can.
The unemployment rate jumped to a five-year high of 4.6 per cent in December, up from 4.2 per cent in September and 3.4 per cent a
year ago. At 105,000, unemployment was up 11,000 on September and 29,000 on December 2007. In Auckland the rise was steeper, to 5.2 per cent from 4.4 per cent in September and 3.5 per cent a year ago.
But Statistics New Zealand's household labour force survey also recorded a rise of 21,000 or 0.9 per cent in the number of people employed. Most of the increase (17,000) was in part-timers, however, and there was a 1.9 per cent drop in the number of hours worked in the quarter, on top of a 1.2 per cent decline in the previous three months.
The average number of weekly hours worked, normally around 35, has dropped to 33 over the past two years.
Economists point to this as evidence that many employers are preferring to spread work more thinly and hang on to skilled staff especially, for fear they will not be able to replace them when things pick up.
Westpac economist Dominick Stephens said the drop in hours worked and the growth in part-time employment suggested firms were responding by taking on staff for fewer hours or giving less overtime, rather than moving straight to layoffs.
That would be positive for consumer confidence, Deutsche Bank chief economist Darren Gibbs said. "Having your hours cut is not great but losing your job is worse."
If people kept their jobs they would keep up their mortgage payments even with lower pay, lessening the downward pressure on the housing market.
Other data such as retail sales also indicate that the recession is biting harder in Auckland than in the country as a whole. ASB chief economist Nick Tuffley said Auckland's larger mortgages and longer commutes had meant last year's high interest rates and high petrol prices had a disproportionate effect.
One of the biggest sectoral declines in employment was in manufacturing, much of which is centred in Auckland.
Mr Stephen said the industries most exposed to the housing market downturn and international crisis - agriculture, construction and manufacturing - had reduced employment levels by between 2 and 5 per cent.
Economists expect unemployment to reach around 6.8 per cent by the end of the year. Every percentage point rise represents about 23,000 out of work.
