New Zealand unemployment rate falls to the lowest level in nearly a decade

Wednesday, 2 May 2018

Unemployment in New Zealand has been falling steadily for years.

Unemployment has fallen for the fifth quarter a row, as the economy continues to add almost 1000 jobs a week.

Statistics New Zealand figures showed unemployment fell to 4.4 per cent in the three months to March 31, down from 4.5 per cent at the end of 2017. Unemployment has not been that low since the end of 2008.

The figures showed the number of people employed rose by 15,000 in the first three months of the year.

As well as more people having at least some work, there are signs that fewer people are seeking more hours.

The seasonally adjusted underutilisation rate fell to 11.9 per cent, down from 12.2 percent in the December 2017.

Across New Zealand, Statistics NZ estimates that 340,000 people are in a position to take on more hours and would like to, however this fell by 5000 over the quarter.

Westpac senior economist Michael Gordon said the labour market was becoming tight.

'Firms are finding it increasingly difficult to find new workers, as the pool of available workers has narrowed over time.'

However Gordon said wage growth was 'missing in action', with the labour cost index climbing by just 0.3 per cent in the quarter, below what economists were expecting.

Annually, the labour cost index climbed by 1.9 per cent, however if the aged-care worker settlement was excluded, the index would have risen by just 1.6 per cent.

'Notably, the share of workers receiving no pay increase at all has been trending higher in the last few years, and is now at its highest since 2010, which was in the wake of the Global Financial Crisis,' Gordon said.