The unemployment rate picked up in the December quarter, a tad more than expected, from the decade low it fell to in the September quarter.
New Statistics New Zealand data shows the rate rose to 4.3%, from 4.0% (revised up from 3.9%). Markets had expected the employment rate to rise by 2, rather than 3 percentage points, from a lower starting point (3.9%).
However, as ANZ economists said earlier in the week, the fall in the September quarter was large and unexpected, and given the volatility in the market, a wide range of outcomes from today’s (Thursday) data wouldn’t be surprising.
“Looking through the noise, it’s fair to say that the labour market is currently in a strong position, with spare capacity having been absorbed following a number of years of solid economic expansion,” they said.
“But growth has slowed of late and headwinds look set to make strong growth a challenge. It appears likely we have seen the best this cycle has to offer, with further meaningful improvement in the labour market looking difficult to achieve.”
The employment rate fell to 67.8% in the December quarter, down from its September quarter peak, due to stronger growth in the working-age population than for employment.
As for wages, these were up 1.9% in the year to December – the same rate as in the year to September.
The market had expected wages to rise by 2.0%.
Increases in the private sector were greater than those in the public sector, at 2.0% versus 1.7%.
April’s minimum wage increase saw the retail sector make a key contribution to the hike in private sector wages.
In the public sector, wage inflation reflected the remaining two-thirds of the nurses’ pay settlement, which came into effect in August.
The release of the labour market data saw the New Zealand Dollar fall from 68.3 USc to 67.6 USc – the lowest it’s been in about two weeks.
The figures make up the last major data release before the Reserve Bank reviews the Official Cash Rate and releases its Monetary Policy Statement on February 13.
It is worth noting that Statistics New Zealand made a number of adjustments in its December quarter data, as it asked employed people extra questions when it gathered information as a part of its survey of working life.