NZ jobless rate falls near eight-year low as participation dips
New Zealand's jobless rate fell near an eight-year low as participation dwindled, while at the same time employment fell. The kiwi dollar dropped on the figures.
The unemployment rate slipped to 4.8 percent in the three months ended June 30, the lowest since December 2008, and down from 4.9 percent in March, Statistics New Zealand said in its household labour force survey. However, the participation rate shrank to 70 percent from 70.6 percent in March as more people left the labour force at the same time as the working-age population expanded.
New employment snapped six quarters of growth, shrinking 0.2 percent in the quarter to 2.54 million, although was still up 3.1 percent from a year earlier. While that missed economists' expectations for a 0.7 percent quarterly gain, it masked a shift from part-time work into full-time employment with full-time jobs rising 0.7 percent in the quarter to 2 million and part-time falling 1.8 percent to 536,000.Total actual hours worked were up 1 percent in the quarter to 85,363 a week and the underutilisation rate, which measures the country's potential labour supply and unmet need for work, fell to 11.8 percent from 12.3 percent.
The New Zealand dollar fell to 74.25 US cents from 74.67 cents immediately before the figures were released. The trade-weighted index declined to 78.09 from 78.49.
New Zealand's labour market has been robust over the past 18 months as firms have been able to create new jobs for an expanding population in an economy underpinned by record tourism, strong migration, a construction boom and more recently the recovery in global dairy prices. While that's made it harder for firms to find skilled labour, something companies regularly complain about, it hasn't fed through to higher wages yet and has acted as a restraint on consumer price inflation.
Professional, scientific, technical, administration and support services have helped drive annual employment growth, rising 11 percent to 316,200 in the June quarter from a year earlier, while construction continues to underpin the labour market rising 8.3 percent to 234,300. Rental, hiring and real estate services jumped 24 percent to 51,200.
Stats NZ's labour market data also included the labour cost index, which showed private sector wage inflation rose 0.4 percent in the quarter for a 1.6 percent annual increase. Public sector wage inflation was up 0.4 percent in the quarter for a 1.9 percent annual gain, and across both sectors, wage inflation rose a quarterly 0.4 percent and an annual 1.7 percent.
About 16 percent of private sector staff got a pay rise in the June quarter and 54 percent had received a hike from a year earlier, for a median quarterly increase of 2.5 percent and a 2.3 percent annual increase.
The quarterly employment survey, also released today, showed private sector ordinary time average hourly earnings rose 0.8 percent to $28.04 in the June quarter and were 1.2 percent higher than a year earlier. Public sector wages shrank 0.9 percent to $38.47 in June for an annual gain of 4.1 percent.