Unemployment: Finance Minister Nicola Willis says rise in hours worked shows economy improving

Kiwis are working more hours, which is a good sign of “more activity going on in the economy”, Finance Minister Nicola Willis says.

Stats NZ figures released yesterday showed unemployment reached 5.3% for the September quarter – the highest rate since December 2016, but in line with what economists had expected.

However, there were also signs of economic recovery in that data, including a 0.9% rise in the hours worked shown in the Household Labour Force Survey. It was the first quarterly increase since December 2023, economists said.

Willis was also pleased with the increase, telling Newstalk ZB’s Mike Hosking Breakfast that it was one of two positive indicators in the data.

“When people are working more hours, that suggests there’s more activity going on in the economy, and they’re able to get more income into their family.”

There had also been a shift away from part-time to fulltime employment, with the fulltime rate up and the part-time rate down, Willis told Hosking.

Some economists believed unemployment figures would drop next quarter, and others were more cautious, as was she.

“Unemployment figures can bounce around a little bit. So I’m not in the camp where I’m confidently saying that we’ve absolutely, definitely got the highest read at this point … we’ll see how it plays.

“What we are seeing across the economy [is] a lot of signs the bottom has been reached and we are now very much in recovery, growing this quarter, expect to accelerate into more growth next quarter.”

Asked about the underutilisation figures of 12.9%, up from 12.8% in the June quarter, Willis said they were always a “sign that you don’t have enough work in the economy to satisfy the people who are wanting work”.

Underutilisation measures those who have some work but say they need more.

There was a simple way to fix this: get inflation and interest rates under control, which the Government had done, Willis said.

Lower taxes also helped. “Once you’ve got that in place, firms will have the confidence to start investing and hiring again.”

But the Government was “ambitious to drive it along”, and that was why it wanted to fast-track private sector developments that had “literally thousands of jobs associated with them”.

“And we’ve had four of those approved already, and many of them will be kicking off well before Christmas. That’s why we’re driving along these public infrastructure projects with $7 billion worth of them starting before Christmas.”

It was also why the Government wanted to open new markets for exporters, welcome international investment and cut red tape for businesses, Willis said.

“All of those things are about giving employers the confidence to take on new workers, because ... you don’t just do it with a Government hiring spree.

“You actually need private, independent businesses saying, ‘I like what’s ahead, I’m confident, I’m hiring.’”