The official rate of unemployment has dropped to a record-low 3.2 percent, StatsNZ has announced.
Releasing the Labour Market Statistics for the December 2021 quarter on Wednesday morning, StatsNZ said it's the lowest rate of unemployment since 1986, when the series began.
It marks a further drop in unemployment, from 3.3 percent in the September 2021 quarter, according to revised figures.
A measure of people actively seeking and available for work, it marks the fifth consecutive fall in unemployment after it rose to 5.3 percent in the September 2020 quarter, reflecting the hit to the economy following COVID-19.
Unemployment remained low in the last quarter of the year, reflecting ongoing difficulty finding workers, StatsNZ work and wellbeing statistics senior manager Becky Collett said.
"The labour market continued to show the tightness we saw in the September 2021 quarter, with both unemployment and underutilisation rates remaining low," Collett said.
The 'underutilisation rate', which measures spare capacity ('slack') in the labour market, stayed at 9.2 percent.
Perceived job security was strong over the December quarter, 46.3 percent of employed people thinking there was 'almost no chance' of involuntarily losing their job (or business) in the next year.
The number of employed people rose by 3000 over the December quarter, with 2,831,000 people employed, according to seasonally-adjusted figures.
The number of full-time workers increased 3.2 percent, to 2,270,000. Part-time workers increased by 5.7 percent, to 567,000.
Young people made up a large portion of rises in employment over the quarter, StatsNZ said.
"For instance, more 15- to 19-year-olds were employed in retail trade and accommodation and food services over the course of 2021," Collett said.
Ordinary time earnings rose 3.8 percent over the year to December, to $35.61 per hour. Average weekly full-time earnings were up 5.7 percent annually, up 1.8 percent over the three months to December.
Wage inflation, as measured by the labour cost index (LCI) for all salary and wage rates, was 2.6 per cent in the year up to the December 2021 quarter.
Discussing the official unemployment figure, independent economist Cameron Bagrie told Newshub the country is now "way beyond" maximum sustainable employment.
"There's continued demand [and] there's not the ability to meet demand in terms of labour resources," Bagrie said.
With wages starting to go up and annual inflation closing in on 6 percent, the latest unemployment figure only reinforces the need for the Reserve Bank to raise the Official Cash Rate to cool the economy down.
While official unemployment continues to drop, December 2021 figures show there were 54,000 more New Zealanders receiving benefits than in December 2019.
"These would be some of the most favourable labour market conditions seen in 30 years...its perplexing to see why in that environment, we're seeing rising welfare dependency," Bagrie added.
Unemployment is expected to stay low over the coming year. Over the longer-term, a consequence of getting inflation back within the 1 and 3 percent range is lower growth - and a rise in unemployment.
Releasing its December data, job website SEEK said job ads were up 32 percent nationally year-on-year (and compared to 2019).
The low number of applications per job showed employees were more cautious about moving jobs during the COVID-19 pandemic. The demand for talent remains extremely high and that isn't expected to change, SEEK country manager Rob Clark told Newshub in January.