NZ unemployment falls to 3-year low in 4Q as jobs growth beats estimates
New Zealand's unemployment rate fell to a three-year low in the fourth quarter of 2013 as jobs growth beat expectations, led by gains in the retail, accommodation and hospitality sectors.
The unemployment rate fell to 6 percent in the three months ended Dec. 31, in line with the forecast by a Reuters survey of economists, and down from 6.2 percent in the September quarter, according to Statistics New Zealand's household labour force survey. That's the lowest jobless rate since June 2009.
Employment rose 1.1 percent in the quarter, beating the 0.5 percent pace of growth forecast, led by gains in retail, accommodation and food services, construction, and professional scientific, technical, administration and support services. Employment grew 3 percent on an annual basis.
"We're seeing strength across the labour market, particularly in industries that provide service," industry and labour statistics manager Diane Ramsay said in a statement. "The unemployment rate has been falling and employment rising for the last 18 months, with both now at levels last seen in early 2009."
The kiwi dollar climbed to 82.43 US cents after the figures were released, from 82.19 cents immediately before as the data added to evidence of a rebounding economy that will spur the central bank to raise interest rates this year.
New Zealand's participation rate rose to 68.9 percent in the December quarter from 68.6 percent in September, and was up 0.7 percentage points from a year earlier, against a backdrop of rising inbound migration.
The labour cost index, which measures wage inflation, rose at a quarterly pace of 0.5 percent across all sectors and including overtime. Private sector wages rose 0.6 percent, ahead of a 0.4 percent increase in public sector wages.
The figures come as surveys last month showed signs of an improving labour market, with gains in employment confidence and firms finding it harder to hire find skilled and unskilled workers. The Reserve Bank is keeping tabs on capacity pressure that may emerge as the Canterbury rebuild and Auckland housing suck up resources, which may spill over into broader inflation if wages rise, and lead to higher consumer prices.
Unemployment in Auckland fell to 6.3 percent in December from 6.7 percent, while Canterbury's jobless dropped to 3.4 percent from 4.2 percent.
The number of construction workers rose to 185,800 in the quarter from 177,800 in the third quarter, and manufacturing jobs increased to 254,000 from 247,900. Retail, accommodation and hospitality employees increased to 363,100 from 356,200. Agriculture, fishing and forestry employees increased to 149,500 from 138,700.
Today's figures show total hours worked fell 0.3 percent to a seasonally adjusted 75.7 million hours in the quarter, though that was 1.3 percent annually.
Underemployment increased, with 5.3 percent of part-time workers wanting to take on more work, compared to 4.2 percent in the September quarter.
The quarterly employment survey, also released today, showed ordinary time private sector wages increased 0.3 percent to $25.98 in the quarter, and were up 3.2 percent on an annual basis. That compared to a 0.2 percent fall in public sector wages to $35.27 and an annual increase of 1.6 percent.
Average weekly earnings for full-time equivalents ordinary time increased 0.2 percent to $1,051.64.
New Zealand's unemployment rate ranked 12th lowest among developed nations, below Chile and above Luxembourg.