N.Z. Jobless Rate Drops to Seven-Year Low, Employment Liftsby
Participation rate falls to lowest since second quarter 2013
Central bank Governor Wheeler due to speak later Wednesday
New Zealand employment rebounded more than economists expected in the fourth quarter while the jobless rate tumbled to near a seven-year low as fewer people sought work. The nation’s currency jumped a third of a U.S. cent.
Employment rose 0.9 percent from the third quarter, when it fell 0.5 percent, Statistics New Zealand said Wednesday in Wellington. Economists had forecast a 0.8 percent increase, according to the median estimate in a Bloomberg News survey. The jobless rate dropped to 5.3 percent, the lowest since the first quarter of 2009. Economists expected a rise to 6.1 percent from 6 percent in the third quarter.
Falling unemployment adds to signs of a tighter labor market that may help fan inflation in coming years after it slowed to 0.1 percent in the fourth quarter, its weakest since 1999. Reserve Bank Governor Graeme Wheeler last week held the cash rate at 2.5 percent and said further monetary policy easing may be required as it will take longer for inflation to reach the middle of his 1-3 percent target than previously expected.
“For the Reserve Bank, today’s labor market release will give them pause for thought,” said Anne Boniface, senior economist at Westpac Banking Corp. in Auckland. “There is certainly no evidence of pressures on the wage front, but economic activity certainly looks to have been solid in the final quarter” of 2015, she said.
The New Zealand dollar rose after the release and bought 65.19 cents at 11:24 a.m. in Wellington.
Wheeler is due to speak about the economic outlook and policy later today. There is a 67 percent chance he will cut rates by June, according to swaps data compiled by Bloomberg.
- Employment rose 21,000 in 4Q
- Working-age population increased 19,000 in 4Q to 3.66 million
- Labor force rose 5,000 to 2.5 million
- Participation rate fell to 68.4 in 4Q from 68.7% in 3Q
- Employment rose 1.3% from year earlier vs. median forecast of 1.1% gain
- Annual employment growth slowest since 2Q 2013
The participation rate also fell to the lowest since the second quarter of 2013 as fewer people sought work, many of whom took retirement, the statistics agency said. The number of people unemployed fell by 16,000 to 133,000.
Part-time employment rose 2.5 percent from the third quarter, while full-time employment gained 0.6 percent, today’s report showed.
Record immigration is making it easier for employers to fill positions without raising wages, with annual net immigration rising to 64,930 in December.
Wages for non-government workers excluding overtime rose 0.4 percent from the third quarter, less than the 0.5 percent increase forecast by economists. From a year earlier, wages rose 1.6 percent -- the slowest since the third quarter of 2010.