To the surprise of economists, the number of unemployed people fell during the lockdown and with working hours slashed, underutilisation jumped significantly.
Photo: 123rf
Despite a predicted increase, the unemployment rate fell from 4.2 percent in the first quarter, to 4 percent in the three months to June.
Economists said while the stats technically looked better, the underutilisation rate painted a more accurate picture.
Underutilisation is a group that includes people who are unemployed but actively looking for a job, those who have a job and want more hours and people who could work but are not.
For the three months to June this figure rose from 10.4 percent to 12 percent - the largest quarterly rise since 2004.
Sarah Anson was one of those who was looking for more work.
She lost her job in Australia and moved home but since returning had not been able to get full-time work.
"It's hell. I've probably applied for over 200 entry-level reception jobs."
Anson said with each one of those came a rejections letter, so she moved to part-time work.
"I'm working three nights a week for a friend and a bar, which is not the dream, but at least it's like some work."
It actually worked out better to do as few hours as possible, she said.
"It's so frustrating because if I work 20 hours [or more] a week I don't get the unemployment benefit or the job seekers benefit but if I work 10 hours a week, I get paid the same amount as I would for 20 hours because I get half of it from the government.
"Is it worth going to work for 20 hours a week or shall I sit at home for the extra 10 hours a week and get paid?"
Luke Hempleman also lost his job in promotions and could soon be forced to join the underemployed workforce.
He was holding out hope for full-time work but would have to look at part-time options soon.
"I've noticed in a lot of my searches that there's been a lot of sort of part-time positions or like contract and fixed-term positions advertised.
"But I'm obviously hoping for full-time work ... I want to keep building my career again and full-time work is where it's at.
"I think if and when my Covid income relief payments run out, I'm going to have to sort of bite the bullet and start looking at those part-time positions," Hempleman said.
Economists had predicted a rise in unemployment in the Covid-19 job market.
Stats NZ senior manager Sean Broughton said the data was a bit skewed because of the lockdown.
"Unemployment rate was 4 percent on average over the quarter, but that broadly reflected the definition of unemployment.
"People have to be actively seeking work. When you've got level 4 and 3 restrictions in place, it's a lot more difficult for people to be actively seeking work.
"And on the flip side of it, you've got businesses that don't necessarily want to recruit that many people," Broughton said.
Kiwibank chief economist Jarrod Kerr said the labour market would likely deteriorate further.
"We've seen a drop in employment of 11,000 people which was lower than most of us thought the employment rate has come off but then if you scratch beneath the surface, the hours worked was down 10 percent and that's a big decline as you'd expect during this period.
"But the underutilisation rate - so the level of underemployment, people who have a few hours work but want more - actually increased from 10 percent to 12 percent. And that's quite a staggering increase."
Even more staggering, Kiwibank said, of the 11,000 people who lost their jobs in the June quarter 90 percent were women.
Kerr told Checkpoint the unemployment figures in general were "so unbelievable - you cannot believe what is being put out".
In part, that was because in order to be deemed unemployed you have to be actively seeking work, Kerr said.
"It's a bit hard to actively seek work when you are in a lockdown. The stats department should have actually looked through this and referred more to the expanded unemployment rate which they have in their report and ... I think that gives a more accurate picture of what's happening. It's moving from 4.2 (percent unemployment) towards 5... and this is just the start."
Some were forecasting it to eventually hit 9 percent after the wage subsidy ended, he said.
Kerr, like others, said the report should be disregarded.
The wage subsidy had been a "good bandaid over a nasty wound" but once it was "ripped off" we would get more of an idea of "how that wound has healed".
He expected the impact of the wage subsidy ending would be "relatively immediate".
"That's when we will see a lot of these workers coming into the market looking for other jobs."
Kerr said the report figures did not reflect a robust economy.
"There is a lot of weakness below the surface and we are by no means out of this and I think the next two employment reports will be critical."
Unemployment for Māori
The unemployment rate followed a similar trend for Māori, dropping to 6.7 percent from 8.7 percent last quarter.
Stats NZ labour market manager Andrew Neal said that drop was not necessarily good, and lockdown again got some of the blame.
"The thing to look at in conjunction with it is that there was also an increase of almost double or was it 14,500 maybe Māori who were not in the labour force, generally people like retired or students but also those who were not working and could like a job but they're not actively trying to find one."
It was previously predicted the Māori unemployment rate could climb as high as 20 percent.
Economists expect the true picture of unemployment will be clearer after the wage subsidy stops and businesses have to make some tough decisions.
