Statistics New Zealand reported employment fell 0.4% or 11,000 in the September quarter from the June quarter, which was the first fall in employment in three years and weaker than market expectations for growth of around 0.4% and the Reserve Bank’s forecast for growth of 0.5%.
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On a seasonally-adjusted basis, the number of unemployed people stood at 203,000 last month, a decrease of 1,900 on September.
ASB chief economist Nick Tuffley said while the household labour force survey could be volatile, low dairy prices and a fall in dairy confidence meant it was likely to reflect a weakening in the job market.
The New Zealand dollar fell half a United States cent after the release and bought 66.62 cents at 1 p.m.in Wellington, hit by weaker prices at the GlobalDairyTrade auction overnight which saw a 7.4 per cent drop in average prices. “Furthermore, employment growth remains broad-based, with increases seen in the majority of sectors monitored by the CSO”, said Mr McQuaid.
With New Zealand immigration running at record highs (see next chart), and jobs growth clearly failing to match population growth, there are also concerns that New Zealand’s unemployment rate could push up towards 7% next year.
But it has been climbing ever since, and Wednesday’s announcement marks the fourth quarter in a row that the unemployment rate rose. “A rate of 6 percent puts New Zealand close to Australia, an economy supposedly close to crisis”, Grant Robertson, finance spokesperson for the main opposition Labour Party, said.
New Zealand employment unexpectedly fell for the first time in three years in the third quarter, pushing up the nation’s jobless rate and sending the currency lower. “Full-time employment actually rose 0.2% q/q”, Borkin said.
“In the United Kingdom and USA, unemployment is falling”. Economists had forecast a 0.4 per cent increase in employment, according to the median estimate in a Bloomberg News survey.
For the year ending September, annual employment growth slowed to 1.5 percent, down from 3 percent in the year to June, with most of the growth in construction. Economists expected a 0.5 percent increase.
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Wage inflation was 0.4 percent in the quarter for an unchanged annual rate of 1.6 percent, based on the labour cost index.
