The lockdown is credited with suppressing the spread of the virus; there is no known community transmission in the country and life has returned to normal except for strict border controls.
Critics of the government had said the shutdown would have too high an impact on the unemployment rate. But Grant Robertson, the finance minister, said the numbers showed the “robustness of the economy” and were a justification for the measures.
“Being able to reopen our economy sooner has saved jobs,” he said. “This is proof that fighting the virus is the best thing we can do for our economy.”
Robertson, of the center-left Labor Party, noted comparative unemployment rates of 7.4% in Australia and 11.1% in the United States.
Yet, as he admitted, the title result doesn’t tell the whole story. Labor force participation and overall employment also fell as people left the labor market completely.
Hours worked (down 10%) and the underutilization rate (10.4% to 12%) – a marker that measures untapped capacity in the economy – have also fallen at record rates.
ASB Economics said the result “quashed widespread expectations of a sharp increase” as workers gave up locked out job searches; Actively seeking employment is a condition for a person to be officially classified as unemployed.
“The laid-off workers chose, or were forced, to leave the workforce in view of the difficulties,” said Nick Tuffley, chief economist at ASB.
“Today’s data is certainly welcome as it points to a stronger-than-expected starting point for the labor market,” he added. “However… we know that labor market conditions are likely to deteriorate from here on.”
Throughout the study period, the New Zealand government used a New Zealand $ 13 billion (A $ 12 billion) wage subsidy system to keep New Zealanders in employment. It ends in September.
Those who lose their jobs as a result will receive increased unemployment benefit for an additional 12 weeks before reverting to basic social assistance payment.
Paul Goldsmith, finance spokesman for the national center-right opposition party, said the shutdown of people looking for jobs showed a drop in confidence.
“Today’s unemployment figures do not tell the whole story of the jobs crisis we are in as a country and are obscured by the 452,425 people receiving wage subsidies,” he said. he declares.
“With the end of wage subsidies from September 1, the real cost of this economic slowdown will be felt then.”
The left-wing Green Party said the numbers added weight to its proposal to lift basic benefits, funded by a wealth tax on the top six percent of earners.
“Covid-19 has left tens of thousands more people working fewer hours than they want, resulting in less stable incomes and more uncertainty for families,” said Marama Davidson, co-leader of the party.
Robertson said the outlook for the rest of 2020 was grim.