Unemployment has dropped further than expected, to 5.6% for
the quarter to June - a five-year low - and 2.32 million New
Zealanders are in work.
The growth in jobs was underpinned by the Canterbury rebuild,
with an extra 10,000 added to the overall ranks of employed
to hit 2.32 million, while those unemployed fell by 9000, to
''The unemployment rate fell from a revised 5.9% to 5.6% and
is the lowest it has been since the March 2009 quarter,''
Statistics New Zealand labour market and households
statistics manager Diane Ramsay said yesterday.
Westpac senior economist Michael Gordon said the positive
surprise on the unemployment rate was tempered by
softer-than-expected results for jobs growth and workforce
participation - although these parts of the survey can be
especially subject to survey volatility and are arguably less
He said the employer-based quarterly employment survey, also
released yesterday, showed a ''very solid'' 1.1% lift in
On balance, the June quarter data pointed to less slack in
the labour market than expected, with the unemployment rate
coming in below forecast at 5.6% and wage inflation a little
higher than expected, Mr Gordon said.
''As such, today's data will support the Reserve Bank's
intention to raise the official cash rate (OCR) over the next
''However, they are unlikely to outweigh the ongoing drop in
dairy prices in the Reserve Bank's mind and nudge it out of
its `period of assessment' any time soon,'' he said.
ASB chief economist Nick Tuffley said by his estimate
Christchurch employment grew 1.7%, quarter on quarter, and
the rebuild impact ''remains firm''.
''The unemployment rate in Christchurch is now very low,
highlighting the likelihood of wage growth in that region
outstripping national trends,'' Mr Tuffley said.
''The strength of employment in Christchurch dovetails with
jobs strength in the construction sector, with employment up
4.8%, quarter on quarter; by our estimate 16.8% year on year.
''Quarterly employment was strong in mining, the utilities,
and rebounded in manufacturing [but] services industries and
retail were generally weak,'' he said.
The recent labour market story has been a rise in labour
force participation to a record rate, which we had put down
to the strong net migration flows, he said.
ASB retained its view the Reserve Bank would next lift the
OCR in December.