Unemployment rate falls to a meagre 3.7pc

The unemployment rate fell to 3.7 per cent in the June quarter from 3.9 per cent in the March quarter, Statistics New Zealand said today.

The rate is the second lowest after the December 2004 quarter since the series began in March 1986.

New Zealand is back on top of the OECD club of rich nations as having the lowest unemployment rate, overtaking South Korea.

Economists had expected the seasonally adjusted data to remain static.

Job growth was slightly higher than economists' forecasts of 0.3 per cent at 0.5 per cent, or 11,000 jobs. Most of those were full time.

Over the year, employment growth was 3.0 per cent. The number of people employed rose 61,000 to 2.065 million.

The continuation of a tight labour market and robust job growth means the Reserve Bank will be less inclined to relent on easing interest rates despite the economy slowing.

The strong data will, however, give comfort to the Government, just five weeks ahead of the election.

The actual number of people unemployed fell by 4000 to 78,000.

The labour force participation rate rose to a record 67.7 per cent from 67.6 per cent. with the female rate rising to 60.9 per cent from 60.7 per cent and the male rate falling from 74.9 per cent to 74.8.

The Maori unemployment rate fell to 8.6 per cent from 8.8 while the Pacific people's rate fell to 6.0 per cent from 6.7 per cent. That compares with the pakeha rate of 2.5 per cent, down from 3.1 per cent.

The working age population grew by 8400 in the quarter but growth continues to slow, both on a quarterly and annual basis, SNZ said. This has been reinforced by the slowing of immigration.

Government statistician Brian Pink said employers would continued to struggle to find workers.

"The gradual slowing in growth in the working-age population, combined with the continuing growth in employment, indicates a further reduction in the capacity of the labour market to meet employers' demand for labour," he said.

The Tasman/Nelson/Marlborough/West Coast region continues to have the lowest jobless rate -- its rate falling to 2.3 per cent from 2.7 per cent. That was equalled by Southland whose rate fell sharply from 3.5 per cent.

Canterbury's rate also fell sharply -- to 2.5 per cent from 3.9 per cent, as did Taranaki's -- to 2.7 per cent from 3.6 per cent.

Northland has the worst rate, climbing to 6.8 per cent from 4.2. Auckland's rate fell to 3.4 per cent from 4.2.

- NZPA