New Zealand unemployment rate rises to 4.0% in fourth quarter From Reuters

©Reuters. FILE PHOTO: A sailing boat can be seen in front of the central business district (CBD) in Wellington in New Zealand, July 2, 2017. REUTERS/David Gray/File Photo

By Lucy Craymer

WELLINGTON (Reuters) – New Zealand’s unemployment rate rose in the fourth quarter, reducing capacity pressures in the labor market, but quarterly wage inflation rose slightly, data released by Statistics New Zealand showed on Wednesday.

New Zealand’s unemployment 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 job growth of 0.3%.

“Unemployment rates are back to 2019 levels, following recent record lows,” said Becky Collett, senior manager of labor and wellbeing statistics. “Low employment was part of the unique economic period from 2021 to 2022, as tight borders limited supply increases and labor demand remained high.”

Wage growth picked up on the quarter with the private sector labor cost index (LCI), excluding overtime, rising 1.0% on the quarter, compared to a rise of 0.8% in the previous quarter. That was stronger than the forecast of a 0.8% increase.

According to the New Zealand Bureau of Statistics, the labor force participation rate is 71.9% and the employment rate is 69%.

An easing of tight conditions in labor markets will be good news for the Reserve Bank of New Zealand (RBNZ). In November the RBNZ held the interest rate at 5.5% and signaled that further increases may be necessary if inflation did not continue to decline.

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