-
Business - Source: Photos.com -
Watch Video
The unemployment rate has dropped further than expected but a labour market analyst says it is not time to get over-excited.
The rate fell from 6.6% to 6.3% in the last few months of 2011, but economist Matt Nolan told TV ONE's Breakfast it is partially due to fewer people looking for work.
"Normally in December lots of people come into the labour market - they come in to work part time jobs and all that sort of stuff - but that didn't happen to the same degree this year," he said.
"As a result, those people stayed outside (the labour market) and the unemployment rate fell."
People need to be available and actively looking for work to be considered officially "unemployed" for the purposes of the unemployment rate, he said.
Nolan told Breakfast students are a good example of why the numbers of unemployment look better than they really are.
"They say 'I might work, or I might not work - I might just prepare for my exams, or for what kind of thing I might do next year.' So they stayed out of the labour market".
Part-time jobs
Yesterday's labour market data from Statistics New Zealand showed a 3% rise in part-timer workers to 517,000.
There are two explanations for why there were more part-time jobs and fewer full-time jobs, according to Nolan.
"One of them is to say hey, we had the world cup in September and October. A whole lot of people who were part-time suddenly had to work full-time, and then pulled back to part-time afterwards," he said.
Europe's ongoing debt problems are also an explanation for the rise in part-time work last year, he said.
"Businesses were really nervous about investing so they went in and employed part time labour - flexible labour - instead of fulltime workers".
Nolan said it is important to consider these statistics in their full context.
