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New Zealand unemployment rate falls to lowest in nine years
[WELLINGTON] New Zealand's jobless rate fell to a fresh nine-year low in the first quarter, adding to signs that sluggish wage growth will eventually pick up.
The jobless rate fell to 4.4 per cent from 4.5 per cent in the previous three months, the lowest since the final quarter of 2008 and in line with economists' forecasts.
Employment rose 0.6 per cent and the participation rate fell to 70.8 per cent, Statistics New Zealand said Wednesday in Wellington.
Lower unemployment and falling immigration may lift wages and start to generate broader price pressures. Still, with inflation languishing near the bottom of the 1-3 per cent target range, the Reserve Bank has signaled it's unlikely to raise interest rates until mid-2019.
The government last month gave the central bank the extra goal of supporting maximum sustainable employment alongside price stability.
"The tight labor market currently looks to be in little need of policy stimulus to meet employment objectives" in the RBNZ's new remit, said Nick Tuffley, chief economist at ASB Bank in Auckland. Still, "the figures depicted a mild wage backdrop, with few signs of widespread wage pressure. This keeps notions of official cash rate hikes on the back-burner," he said.
New Zealand's dollar fell after the report. It bought 69.98 US cents at 12.03pm in Wellington from 70.08 cents immediately before the release.
Employment kept pace with the increase in the working-age population, the statistics agency said.
The key details were: Employment growth accelerated from a revised 0.4 per cent; economists expected 0.6 per cent.
Employment rose 3.1 per cent from a year earlier; economists forecast 3.3 per cent. Participation rate slowed from a revised 70.9 per cent; economists expected per cent.
Filled jobs dropped 0.2 per cent quarter on quarter.
Wage inflation was benign with signs of growth emerging in a handful of industries including agriculture and construction, the data showed.
The new Labour-led government raised the minimum wage on April 1 and is proposing industrial relations reforms which may fan faster increases in worker incomes, economists say.
The key details of the wages data were: Non-government ordinary time wages rose 0.3 per cent quarter on quarter; economists expected 0.5 per cent. Non-government ordinary time wages rose 1.9 per cent year on year, matching the previous quarter.