Unemployment dropped to 4 percent in the June 2021 quarter, Statistics New Zealand confirms.
Released on Wednesday, the Labour Market Survey for the June 2021 quarter shows the number of unemployed people fell to 117,000, seasonally adjusted figures show.
Compared to the March 2021 quarter, when the unemployment rate was 4.7 percent, there were 17,000 fewer unemployed.
A measure of people actively seeking and available for work, it marks the third drop in unemployment after it rose to 5.3 percent in the September 2020 quarter.
The 'underutilisation rate', which measures spare capacity in the labour market, fell 1.6 percentage points over the quarter, to 10.5 percent.
Statistics New Zealand senior manager Sean Broughton said the drop in official unemployment was in line with other data, showing fewer people receiving benefits, increased job vacancies and reports of labour shortages.
Underutilisation falls to 10.5 percent
Over the June 2021 quarter, there were 48,000 fewer underutilised people, leaving 315,000 people underutilised. It marks the largest quarterly fall since records began, he said.
"The large decrease in underutilisation shows that spare capacity in the labour market is dwindling, which can potentially result in tighter labour market conditions and lead to upwards pressure on wage rates," Broughton said.
Underemployment falls by 16,000 over the quarter
People who were underemployed, being those who were working fewer than 30 hours and able and willing to work more hours, fell by 16,000 over the quarter, to 107,000.
Compared to June 2020, 46,800 more people were in employment - a total of 2.770 million people, non-seasonally adjusted figures show. This represents 28,300 more women and 18,400 more men.
Wages increase 2.1 percent over the year
Statistics New Zealand also confirms salary and wage rates increased 2.1 percent over the year to June 2021 (includes overtime).
Private sector wages increaed 2.2 percent over the year, public sector wages by 1.9 percent.
Average ordinary time hourly earnings rose 4 percent, to $34.76.
For full-time workers, average weekly earnings (including overtime) rose 9.2 percent over the year, to $1360.62.
Infometrics principal economist Brad Olsen said Wednesday's announcement shows just how tight the labour market is.
"Going back to 4 percent - lower than we were pre-pandemic and with the sharp drop in underutilisation to 10.5 percent, we are seeing an incredibly tight labour market," Olsen said.
Looking ahead, as borders remain closed and with no net migration, that's unlikely to change quickly.
"The talent pool available resourcing New Zealand's economic recovery is highly constrained at this point," Olsen added.
Earlier on Wednesday, ASB chief economist Nick Tuffley said the bank had forecast the unemployment rate to fall to 4.4 percent, and would review it's forecast following the official announcement.