New Zealand’s jobless rate rises to 4.0% in the fourth quarter

WELLINGTON — New Zealand’s jobless rate increased in the fourth quarter, reducing capacity pressures in the labour market, but quarterly wage inflation increased slightly, according to data released by Statistics New Zealand on Wednesday.

New Zealand’s jobless rate rose to 4.0% in the fourth quarter even as employment grew 0.4%. Economists polled by Reuters had forecast an unemployment rate of 4.2% and employment growth of 0.3%.

“Unemployment rates have returned to 2019 levels, following recent historic lows,” work and wellbeing statistics senior manager Becky Collett said. “Low employment formed part of the unique economic period from 2021 to 2022, as restricted borders limited increases to supply and labour demand remained high.”

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Wage growth increased in the quarter with the private sector labour cost index (LCI) excluding overtime recording a 1.0% lift on the quarter, compared with a 0.8% increase in the prior quarter. It was stronger than the forecast of a 0.8% increase.

Statistics New Zealand said the labour force participation rate was at 71.9% and the employment rate was at 69%.

An easing in tight labour markets conditions will be good news for the Reserve Bank of New Zealand (RBNZ). The RBNZ in November held the cash rate at 5.5% and signalled further hikes might be needed if inflation did not continue to ease.