NZ jobless rate falls to 6.2% on record employment jump
NZ jobless rate falls to three-year low 6.2% as employment records record quarterly jump
By Jonathan Underhill
May 9 (BusinessDesk) – New Zealand’s jobless rate fell to a three-year low in the first three month of the year as the employment rate grew for the first time in four quarters, fuelled by demand for workers in Canterbury.
The unemployment rate fell to 6.2 percent in the first quarter, the lowest since March 2010, from a revised 6.8 percent three months earlier, according to Statistics New Zealand’s Household Labour Force Survey.
The number of people in work climbed by 38,000, or 1.7 percent in the quarter to 2.23 million, the biggest jump since the series began in March 1986, while the participation rate improved to 67.8 percent from 67.2 percent.
The figures, though notoriously volatile, show a stronger jobs market than economists had expected.
The jobless rate was expected to be 6.8 percent, according to a Reuters survey of 12 economists. Jobs growth was forecast to be 0.8 percent quarter on quarter. The participation rate met expectations.
Much of the strength was driven by Canterbury, where the jobless rate tumbled 21 percent to 4.3 percent and the participation rate and employment rates climbed. Excluding Canterbury, which is rebuilding from its disastrous earthquakes, the labour market was more subdued, Statistics New Zealand said.
"Outside of Christchurch, employment is struggling, particularly in the tradable sector," Peter Cavanagh, senior client advisor at Bancorp Treasury, said before the report was released.
The data follows figures this week showing private sector ordinary time wages rose 0.4 percent in the first three months of the year from the fourth quarter of 2012, and gained 1.8 percent from the first quarter last year.
While this week’s data shows a bounce back from a surprisingly weak fourth quarter, there have been some high-profile job cuts that underline that the labour market is still tepid. The employment rate is still down 0.3 percentage points over the year and well below levels seen before the 2008 and 2009 recession, the department said. The participation rate is down 0.8 percentage points in the year.
Fonterra Cooperative Group, which imposed a hiring freeze in February, said this month it may eliminate up to 300 jobs as it seeks annual cost savings of $65 million a year, adding to $60 million of cost cutting already targeted for 2013. Solid Energy yesterday announced plans to cut 105 jobs, adding to 440 already shed as the unprofitable state-owned coal miner. Tait Communications announced restructuring that could cut 70 workers.
Today’s figures showed some improvement in employment for young people. The jobless rate for people aged 20-24 fell 4.1 percentage points to 10.9 percent, the lowest since the third quarter of 2009