New Zealand Q1 unemployment falls but wage growth remains tepid

[WELLINGTON] New Zealand's jobless rate dropped to 4.9 per cent though wage stayed sluggish in the first quarter as people found more jobs in tourism and construction, Statistics New Zealand said on Wednesday.

The New Zealand dollar rose to US$0.6965 from US$0.6940 before the release.

Analysts had been expecting the unemployment rate to remain unchanged from the previous quarter at 5.2 per cent.

Though better-than-expected, the result was unlikely to move the Reserve Bank of New Zealand from its determination to keep interest rates on hold at 1.75 per cent for years to boost tepid inflation and account for global uncertainty.

The participation rate jumped slightly to 70.6 per cent, just above analysts' expectations that it would stay at 70.5 per cent.

Jobs growth grew 0.8 per cent largely due to the accommodation, food services and construction sectors adding employees to service the country's tourism and building booms.

Wages grew 0.4 per cent on the quarter for 1.5 per cent annual growth, below analysts' expectations of 0.5 per cent quarterly growth and a 1.7 per cent rise on the year.

REUTERS