Jobless rate at five-and-a-half year low

Photo / NZ Herald

New Zealand's unemployment rate fell to a five-and-a-half year low in the September quarter as employers took on a growing number of migrants and the Canterbury rebuild continued to provide jobs. The New Zealand dollar rose.

The unemployment rate fell to 5.4 percent, or 134,000 people, in the three months ended Sept. 30 from 5.6 percent in the June quarter, according to Statistics New Zealand's household labour force survey.

That's the lowest rate since March 2009 and was in line with economists' expectations. The participation rate increased 0.1 of a percentage point to 69 percent, even as the working age population expanded 0.4 percent as new migrants and returning kiwis flooded the labour market.

Employment grew 0.8 percent, above the 0.6 percent predicted, to 2,35 million people, and was up 3.2 percent on an annual basis. Canterbury continued to drive jobs growth, up 11 percent in the past year and reporting the lowest unemployment rate across the regions at 3.2 percent.

"The wide range of business surveys show that hiring intentions are high, remarkably high. They suggest the splurge in employment over the last 12-18 months, far from being a flash in the pan, is set to continue, even accelerate," Bank of New Zealand economist Craig Ebert said in a note before the release. "This looks strong enough to send the unemployment rate further downward, even with the added supply coming via immigration."

Rising migration has been a key factor in maintaining the country's economic momentum, fuelling a participation rate while at the same time keeping a lid on wage increases.

The New Zealand dollar jumped to 78.13 US cents from 77.68 cents immediately before the 10:45am release.

Statistics NZ also released the labour cost index, which showed wage inflation rose 0.4 percent in the quarter across all sectors including overtime for an annual 1.6 percent lift.

Private sector wages outpaced those of their public servant counterparts, up 0.5 percent in the quarter and 1.9 percent in the year.

The quarterly employment survey, also released today, showed ordinary private sector wages rose 1.4 percent in the quarter to $26.67 an hour, and were up 2.9 percent in the year, outpacing the 0.3 percent quarterly pace and 1 percent annual pace of consumer price inflation. Private sector average weekly full-time equivalent earnings were up 0.4 percent in the September quarter to $994.65, for a 2.1 percent annual gain.

The household labour force survey showed full-time employment rose 0.7 percent in the quarter for a 3.7 percent annual gain, while part-time employment fell 0.6 percent in the quarter for a 1 percent yearly increase. The underemployment rate, where part-timers want to take on more hours, fell to 3.9 percent from 4.2 percent in the June quarter.

Total hours worked increased 0.3 percent to a seasonally adjusted 78.7 million hours in an average work week, and were up 3.3 percent on the year.

Construction continued to drive jobs growth, with 211,300 people employed in the sector compared to 205,700 in the June period, while information media and telecommunications employment rose to 45,200 from 39,200, and arts, recreation and other services climbed to 155,200 from 138,100.

New Zealand had the ninth lowest unemployment rate among OECD countries in the quarter, behind Mexico and Germany at 4.9 percent, and above the US, Australia and Luxembourg at 6.1 percent.

Read the Statistics NZ's September quarter employment survey here: