Jobless rate falls to near eight-year low

  • 02/11/2016
Close-up financial chart on LCD display. Stock photo.

New Zealand has recorded its best unemployment rate in almost eight years with third quarter figures falling to a better than expected 4.9 percent.

The jobless rate declined from a revised 5.0 percent in the June quarter, according to Stats NZ, taking it to its lowest point since December 2008.

There were 3,000 fewer people unemployed than in the previous quarter and 10,000 fewer over the year.

Employment grew 1.4 percent in the quarter, outpacing a 0.5 percent gain economists were picking, with rental, hiring and real estate services adding 5,000 jobs in the period.

That was also faster than a 0.7 percent increase in the size of the working-age population, which helped drive up the participation rate to a record 70.1 percent under the new methodology.

""The number of people employed in New Zealand was up 35,000, or 1.4 percent, in the September 2016 quarter," labour and income statistics manager Mark Gordon said.

"This strong growth in employment, coupled with fewer unemployed people, pushed the unemployment rate below 5.0 percent for the first time in nearly eight years."

Employment Minister Steven Joyce said more jobs and higher wages were helping Kiwi's get ahead.

"For the first time Statistics New Zealand has recorded data on employment relationships which shows that 90 percent of people in paid employment are in permanent jobs. This confirms the vast majority of New Zealanders are in stable, long-term employment," he said.

But Labour leader Andrew Little says figures that show an increase of 3000 young people not in employment, education or training, taking the total to 74,000 in the September quarter.

"With house prices rising 13 percent annually, average rents increasing by $780 this year, and more young people being left behind, small movements in unemployment will be cold comfort to Kiwi families struggling to pay the bills," he said.

Act leader David Seymour welcomed the overall results and said it signalled time for a tax cut.

"As more people move into employment the government sucks up extra revenue from income tax and spends less on benefits. That creates space to give workers some long-awaited tax relief," he said.

The Council of Trade Unions welcomed the "small reduction" in the number of unemployed but said there were still 128,000 people officially looking for work.

"In addition there are 203,200 people looking for work but not satisfying the official definition of unemployment, or working part time but wanting more work," said CTU economist Bill Rosenberg.

"That's a total of 329,000 people not getting the work they want."

The New Zealand dollar rose to 72.05 US cents from 71.81 cents immediately before the report was released. The trade-weighted index climbed to 77.49 from 77.16.

Wage inflation remained muted, with the ordinary time private sector labour cost index increasing 0.4 percent in the quarter, unchanged from the previous quarter, while public sector wages rose 0.7 percent in the quarter, due largely to new collective agreements for nurses, primary teachers and police.

Auckland accounted for more than half of the new jobs added in the quarter, though its unemployment rate ticked up to 5.3 percent from 4.7 percent as more people entered the labour force.

The Tasman, Nelson, Marlborough, West Coast region had the lowest unemployment rate at 2.8 percent, while Northland's was still the highest at 7.6 percent.