Unemployment drops sharply to 5.3%, near six-year low
New Zealand unemployment unexpectedly fell to near a six-year low in the final three months of 2015 as people left a labour market flooded by strong migration and as employers took on more workers. The kiwi dollar initially jumped almost half a US cent.
The unemployment rate fell to 5.3% in the December quarter from 6% three months earlier, according to Statistics New Zealand's household labour force survey. That's the lowest level since March 2009, and came in below economists' predictions for an unemployment rate of 6.1%. Employment grew 0.9%, slightly ahead of estimates, while the participation rate fell to 68.4% from 68.7% three months earlier.
"Although the number of employed people has risen, there was also growth in the number of people not participating in the labour market," Diane Ramsay, labour market and households statistics manager, said in a statement. "This has contributed to labour force participation falling for the third quarter in a row."
Record inflows of migrants have kept the labour force expanding over the past year, helping limit wage growth in a benign inflation environment, even as employers complain about the difficulty of finding staff.
The working-age population expanded 0.5% in the quarter to 3.66 million, for a 2.3% annual increase. At the same time, employment grew 1.3% in calendar 2015 to 2.37 million, while unemployment shrank 6.7% to 133,000. The number of jobless people, which includes unemployed people of working age not seeking a job, rose 0.7% to 259,000 in the year.
The data comes ahead of Reserve Bank governor Graeme Wheeler's first public speech of the year, this afternoon, where he's expected to elaborate on adopting a bias for lower interest rates as low oil prices keep a lid on inflation.
The kiwi dollar rose as high as 65.42USc after the data was released, from 65.02USc immediately before, and was recently at 65.16USc.
The labour cost index, also released today, showed private sector ordinary time wage inflation rose at an annual pace of 1.6% in December, meeting economists' expectations, and more than the 1.5% pace recorded in the public sector. Wage inflation rose 0.4% in the quarter across all sectors. .
The quarterly employment survey, which rounds out today's labour data dump, showed private sector weekly earnings for full-timers rose 0.6% to $1035.37, an annual increase of 3.4% and more than the 0.1% pace of consumer price inflation over the same period. Across all sectors, weekly earnings rose 1% in the quarter for an annual rise of 3%.
Average ordinary time hourly wages rose 0.3% in the quarter to $29.38, for a 2.1% annual increase. Average private sector hourly wages increased 0.2% in the quarter to $27.44 for a 2.5% yearly rise, while public sector wages advanced 0.4% to $36.53 – a 1.5% annual increase.
The household labour force survey showed professional, scientific, technical, administration and support services generated the biggest jobs growth in the quarter, rising 6.6% to 275,500. Construction work grew 3.1% in the quarter to 232,000, while manufacturing jobs increased 1.8% to 254,400. Agriculture, forestry and fishing jobs climbed 5.7% to 148,200.
Part-time jobs rose 2.5% in the quarter to 523,000, 0.6% below the same quarter a year earlier, while fulltime jobs rose 0.6% in the quarter to 1.85 million, an annual increase of 1.9%.
The total number of hours worked increased 1% to 79.1 million in an average week for the quarter, up 2.1% on the year.