Most of job growth centred on Canterbury

Reactions were wide and varied to the latest labour and wages data released yesterday, showing New Zealand showed strong employment growth in December, along with subdued wage growth.

Unemployment fell to 6% in December from 6.2% in September and the Household Labour Force Survey showed a second successive quarter of strong employment growth.

However, the underlying story, at the national level, was not probably quite as strong as the 1.1% quarterly employment gain made out. Most of the fourth-quarter strength was concentrated in Canterbury. Other employment indicators were not as strong.

ASB chief economist Nick Tuffley said Canterbury's employment rose 4.4% in the quarter, according to his seasonally-adjusted estimate. Ex-Canterbury employment was up just 0.3% in the quarter.

''The outsized strength of the rise in Canterbury employment takes some of the gloss off the 1.1% headline number. So, too, do the other measures of employment released today,'' he said.

Statistics New Zealand figures showed actual hours worked fell 0.3% in the quarter to be up just 1.3% for the year. The employment measures in the Quarterly Employment Survey did not show any great strength. Fulltime equivalent employees rose by 0.2% in the quarter and filled jobs rose by 0.4%.

Those measures were typically more stable than the Household Labour Force Survey employment measure and continued to point to a steady - rather than spectacular - increase in employment growth since late-2012 early-2013, Mr Tuffley said.

Wage growth continued to track in line with expectations. According to the more stable Labour Cost Index, total ordinary time earnings rose 0.5% quarter-on-quarter and the annual rate of growth was stable at 1.6%.

Quarterly wage growth did increase a little in the private sector and that fitted with expectations of wage growth reaching the bottom and climbing from there, he said.

''With unemployment still quite high, and with headline consumer price inflation having been very low for a while, wage growth is likely to pick up only gradually,'' Mr Tuffley said.

Tertiary Education, Skills and Employment Minister Steven Joyce said the data confirmed the growth was right across the country and showed the New Zealand economy was heading in the right direction.

New Zealand's unemployment rate remained better than most OECD countries and was just behind Australia's 5.8%. New Zealand had a significantly higher employment rate than Australia because of the higher participation rate. The average unemployment rate across the OECD was 7.8%.

''While steady progress is being made, as a country we need to remain focused on encouraging investment that will bring jobs and higher incomes for New Zealanders and their families,'' Mr Joyce said.

Labour social development spokeswoman Sue Moroney said there was no cause for celebration in the latest figures on unemployment.

Despite a drop in the overall numbers of unemployed, the figures for youth, Maori and women were all up significantly. The number of unemployed 15- to 19-year-olds had increased 4000 since National took office.

Just as troubling was the number of youths not in education, employment or training which had increased by 11,300 since 2008, she said.

Council of Trade Unions economist Bill Rosenberg said workers were missing out on a ''fair share'' in the economy as unemployment remained high and wages were stagnant.

The unemployment rate of 6% was disappointing, given 147,000 people were still out of work.

New Zealand had the fifth-highest economic growth rate in the OECD but was 12th in unemployment, despite having been hit much less hard by the global financial crisis, he said.

''At this stage in the recovery, New Zealand's unemployment rate should be much lower. We should be disappointed it isn't below 5%, rather than seeing it creep down at a glacial rate.''

Six years ago, before the GFC began, it was 3.5% and Government efforts should be focused on returning it to that rate, Mr Rosenberg said.

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