By Bernard Hickey
New Zealand's economy generated a stronger-than-forecast 22,000 new jobs in the March quarter, but an increase in the size of the labour force soaked up the increase and meant the unemployment remained higher than expected at 6.0%. The labour forece participation rate rose to a fresh record high.
Despite signs of capacity constraints emerging as the economy grows at an annualised rate to around 4%, wage inflation remained subdued, which is expected to help the Reserve Bank as it tries to keep inflation around 2%.
Statistics New Zealand has reported the unemployment rate was steady at 6.0% in the March quarter, which was above economists forecasts for a drop to around 5.8%.
However, jobs growth of 0.9% for the quarter was in line with or above expectations and the jobless rate was flat because of a 0.4 percentage point increase in the participation rate to a fresh record high of 69.3%.
Average ordinary time hourly earnings as measured by the Quarterly Employment Survey rose 0.8% for the quarter and was up 2.5% from the same quarter a year ago. This was in line with expectations.
"We're seeing more people in the labour market, with the participation rate surpassing the previous high in late 2008 before the downturn in the labour market," labour market and households statistics manager Diane Ramsay said.
"The rise in participation is on the back of more people in work, while the number of people looking for work remains unchanged. Employment continues to rise, with growth seen across a number of regions, industries, and demographics," Ramsay said.
Annually, the number of people employed rose 3.7 percent in the Household Labour Force Survey (HLFS). Demand for workers from established businesses rose 2.6 percent in the Quarterly Employment Survey (QES).
Annual wage inflation, as measured by the labour cost index (LCI) salary and wage rates (including overtime), was 1.6 percent, which was a touch below expectations for annual wage inflation of 1.7%. The LCI measure of salary and wage rates found they rose 0.4% in the quarter, which was slightly below forecasts.
The Household Labour Force Survey found the number of employed people rose 22,000 in the quarter to 2.318 million and was up 3.7% from the March quarter a year ago. The number of unemployed was flat at 147,000 in the quarter and down 1.1% from a year ago. The unemployment rate was down 0.2 percentage points from a year ago.
Labour cost
Select chart tabs
(Updated with more details, chart)
7 Comments
Statistically speaking we are all gainfully employed in trying to work out why jobs are not there to date, but jobs for the boys are being provided as quick as a flash, for an ex-MP's sake, to improve the statistics of re-election, but that was replacing a problem statisic, not a real one.
Statistically speaking also, Mr Key has no idea where 3,000 soon to be employed workers in Christchurch will lay their weary heads.
He has worked out how to pay for it, it will be a freebee. (Unless a taxpayer of course).
Maybe they can all bunk up together, 3 at a time not stay in the best hotels, like when a Royal Contingent arrives for their freebee.
That way it will only take a 1000 rooms, that Mr Key can finance out of his loose change, that he should have considered neccessary a long, long time ago, in preparation.
The Royal Visit alone, could have provided 300 cheap caravans and a portaloo, but what the heck.
Some of Christchurches residents are used to that option already, maybe the Royal Wee
experinced the same, or took note, in their travels.
Maybe Key should have also consulted his Housing Minister, who seems to be a tad remissfull in supplying cheap lodgings, everywhere, not just in Christchurch. I am sure he has a few rooms to rent, as do a number of others, in on the rentier act.
Shall we see how long this comment lasts on this blog, I seem to be losing Interest as do others whose opinions do not count, as a matter of interest.
Statisically speaking, that is, there is more and more, deletions than real comments, unless favourable or economic with the real truth.
All statistics aside, that is.
You can work wonders with statistics, when they suit.
You can also hide the real truth.
These HLFS results as always can only be used to give an idea of where unemployment is at. Quivering over 10 or 20 bps is a mug's game.
Using an up or downturn in these numbers as the basis of measuring the performance of the economy is just a nonsense.
Measuring what per capita income tax was paid, or what GST was received are a better measure of economic performance.
I suspect that outside insurance cash rich Christchurch and property crazed Auckland, that the other half of the economy is rather mediocre.
I think you need to read the numbers a bit better Crazy Horse rather than be influenced by a journlist's headline bias, its actually good news. There's 22,000 new jobs, more people coming in to the work force i.e. the participation rate is up hence the static unemployment rate...the strongest year of jobs growth since records started in 1986. I'm not sure about "Rock Star" economy, but certainly the envy of most
Fair call Grant A .....however from reading many of your posts, you have a real bias towards the banks, who might I add are doing absolute gangbusters at the moment .....but for many small business owners out there, its a different story and a different economy, as well as some salaried employees.
Might be a "rock star" time for the banks, but not all have been invited to the "after gig" party......
Yes crazy horse true, I've worked for some of them in the past and therefore have a balanced opinion on them. And I agree they are doing ok at the moment although much of their most recent profits gains have come from a reduction and write back in bad and doubtful debts, a sign that their customers are recovering, and from modest lending growth, be it at lower margins. Other than in the short term, banks only make profit growth if their customers are doing ok and growing. Some are, Agri and construction related in particular, some aren't as you say, but then I've never seen an economic recovery where it s uniform for all.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.