South Island unemployment rate falls to 3.6%

The South Island is well ahead of the North Island as far as unemployment goes, with Canterbury and Otago unemployment rates being less than 4%.

Canterbury is on 3.1% and Otago on 3.8%. Auckland has a 6.9% unemployment rate and Wellington has a 6% rate. All rates are not seasonally adjusted.

Southland has a 4.2% unemployment rate and Tasman/Nelson/Marlborough/West Coast is on 4.4%.

The South Island also has participation rates equal or better than the rest of the country, according to the Statistics New Zealand figures released yesterday. )The New Zealand figures showed an unchanged unemployment rate from December at 5.8%, an unchanged employment rate at 65.5% and a labour force participation rate at 69.6%.

Average ordinary time hourly earnings were unchanged from December at $28.77.

While there was annual growth in the main labour market indicators, there had been no change in the three months ended March, the statistics showed.

Tertiary Education, Skills and Employment Minister Steven Joyce said it was encouraging to see strong job growth continuing.

''We have seen job growth in 16 out of the last 17 quarters and job growth is running ahead of Treasury predictions.''

Mr Joyce pointed to the hourly wages increasing 2.1% over the past year, compared with a consumer price index increase of 0.1%.

But Labour leader Andrew Little said New Zealand's ''rock star'' economy was failing to deliver a surplus, real wage increases or job growth, with unemployment stuck at 5.8%.

''The Government trumpets the 3% growth rate and tells us we are on the cusp of something special. Yet today's unemployment figures are not showing the benefit of that growth. Unemployment has stalled and, at the same time, wage growth is the lowest it has been in two years.''

ASB economist Chris Tennent-Brown said the 0.7% increase in the number of people employed in March was respectable, with more people employed in New Zealand than ever before.

But the supply was strong enough to keep a degree of slack in the labour market, despite several years of strong employment growth.

''That slack is helping keep wage pressures very subdued. In fact, we see future wage pressures being subdued enough to enable the Reserve Bank to cut the official cash rate later this year.''

ASB expected two OCR cuts in the second half of the year, most likely starting in September, he said.

The lift in the participation rate was holding up the unemployment rate. Those dynamics were expected to continue. Future employment growth would help the unemployment rate to eventually fall towards 5%. but the decline was being slowed by strong growth in the labour force.

''Importantly, more people are working than ever before. Over the last year the number of people employed rose 74,000 while the number of unemployed fell 1000.''

In the past quarter, nearly half the employment growth occurred in Auckland. Canterbury had been a key driver of employment growth in the past but within the latest quarter's data, the rate of employment growth was slowing, Mr Tennent-Brown said.

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