KEY POINTS:
A slowing economy has been reflected by an easing in the labour market with employment slightly down and unemployment creeping up according to the latest statistics.
The Household Labour Force Survey for the three months ending September 2006 showed 2,118,000 people in employment, a decrease of 9000 or
0.4 per cent, Statistics New Zealand (SNZ) said today.
Unemployment rose by 4000 to 83,000 over the quarter -- a 5.5 per cent increase -- taking the overall unemployment rate to 3.8 per cent, up 0.2 of a percentage point.
The labour force participation rate remained high at 68.3 per cent, but did ease by 0.4 of a percentage point.
The number of people not in the labour force was up 19,000 (1.9 per cent) to 1,024,000.
The decrease in employment was mainly due to falls in female full-time and part-time employment, with male employment steady.
In annual terms, employment growth of 1.5 per cent remained strong, SNZ said.
While the results were slightly worse than most economists were picking, the number of people employed remained the second-highest recorded in New Zealand and showed the labour market remained tight by historical standards.
Unemployment rates were highest amongst Maori (7.6 per cent), Pacific peoples (5.1 per cent) and others (5.8 per cent).
The European/Pakeha rate was 2.7 per cent, though unemployment rates across all ethnic groups were low by historical standards with the survey showing a significant annual increase in the number of Maori employed.
In annual terms there has been strong growth in construction, communication services, and property and business services.
Regional employment growth has increased significantly in Waikato, Bay of Plenty and Wellington with only Canterbury recording a significant decrease in employment on an annual basis.
Goldman Sachs JBWere economist Shamubeel Eaqub said the data was "pretty weak", with both full time and part time job losses. "In terms of what this means I think the corporate sector is finally getting the upper hand in terms of the labour market.
"We have been saying for some time the demand side of the equation for labour has been falling off and this is the first real evidence of that filtering into employment numbers," he said.
"On balance, this suggests that the economy is slowing and that further interest rate increases are not necessary."
Citigroup market economics co-head Stephen Halmarick said the higher unemployment rate indicated interest rates were on hold for a long time to come.
First NZ Capital chief economist Jason Wong said employment in the past couple of quarters had been surprisingly strong and today's weaker data, averaged out with the past few quarters, seemed more realistic.
- NZPA
