New Zealand unemployment just hit a nine-year low.
According to data released by Statistics New Zealand (StatsNZ) today, the national unemployment rate fell to 4.8% in the June quarter, leaving it sitting at the lowest level since the December quarter 2008.
It was lower than the 4.9% rate reported in the previous quarter, and was in line with market expectations. It fell by 0.3 percentage points from a year earlier.
“The fall in unemployment over the quarter came primarily from 10,000 fewer women being unemployed. This pushed the female unemployment rate down 0.8 percentage points to 4.9%, the lowest unemployment rate for women since the March 2009 quarter,” said StatsNZ.
“The male unemployment rate rose by 0.5 percentage points, or 7,000 men, to 4.7% in the June 2017 quarter.”
However, the decline in national unemployment rate was driven by a sharp drop in labour market participation, masking an unexpected decline in jobs growth.
StatsNZ said that employment fell by 0.2% to 2.535 million people in seasonally adjusted terms, missing expectations for an increase of 0.7%. From a year earlier employment still increased by a solid 3.1%.
“The fall in employment primarily came from 5,000 fewer men being in employment this quarter, while the number of women in employment increased by 1,000,” said StatsNZ.
This chart shows the percentage change in employment and New Zealand’s working age population over the past six years.
Despite the drop in employment, a sharp slide in labour market participation was still enough to lower the national unemployment rate.
It tumbled by 0.6 percentage points, or 7,000 people, to 70.0%, well below the 70.7% level expected.
The labour force comprises people in the working-age population who are either employed or unemployed.
With more people dropping out of the labour market, the number of unemployed persons fell by 2.2% to 128,000.
Despite the drop in the unemployment rate, growth in wages remained weak.
They increased by 0.4% over the quarter, leaving the increase on a year earlier at 1.7%. This was broadly in line with market expectations.
Private sector wages grew by 1.6% over the year, outpaced by a 1.9% lift in the public sector.
It was the fourth consecutive quarter that annual growth in public sector wages outpaced that for private sector workers.
The weakness in wage growth likely reflects that there is still ample levels of labour market slack within the New Zealand economy at present.
StatsNZ said that the labour market underutilisation rate fell by 0.5 percentage points to 11.8%.
An underutilised person may be unemployed, underemployed (wanting more hours), an unavailable jobseeker, or an available potential jobseeker, the group said.
Reflecting the weak internals of the June unemployment report, the New Zealand dollar has weakened in early Asian trade on Wednesday, losing around 0.5% against both the Australian and New Zealand dollars.