The new Labour-led Government has inherited a stronger-than-expected labour market and New Zealand's unemployment rate is the lowest for nearly nine years.
Statistics New Zealand figures released yesterday for the three months ended September showed labour force participation rate was up 1% to 71.1%, the employment rate was up 1.1% to 67.8% and the unemployment rate was down 0.2% to 4.6%.
The Government is planning to review New Zealand's official measures of unemployment. The quarter covered the last three months of the National-led government.
Westpac senior economist Michael Gordon said the 4.6% unemployment rate was lower than the market forecast of 4.7%.
''This is the lowest unemployment rate since December 2008, when the global financial crisis was in full force.''
The Otago unemployment rate was 3.9%, the lowest since September 2016. Canterbury had 3.6%, the lowest since June 2016 but Southland had a rise in unemployment to 5.2% from 4.6% in June.
The regional figures are not seasonally adjusted and can vary widely from quarter to quarter.
Mr Gordon said the labour market report painted a stronger picture of employment than expected, even after allowing for some unusual quarterly moves.
However, wage inflation was showing no signs of picking up, even with consumer price inflation no longer at rock-bottom levels.
Mr Gordon focused on the large increases in both employment and labour force participation, which reached a record high.
Those two measures often had unusual, but correlated, swings from quarter to quarter, and the big rise in September followed a drop in June that did not jibe with other indicators in the labour market, he said.
As an indicator of spare capacity, Statistics NZ also highlighted the underutilisation rate, which held steady at 11.8% for the September quarter and was down from 12.3% a year ago.
The Labour Cost Index rose 1.9% in the year to September. It included the impact of the equal pay settlement for aged and disability care workers, which raised the wages of about 55,000 workers by as much as 28% for those previously on the minimum wage.
Excluding the impact, the annual rise in the index was 1.6%, down from 1.7% in the June quarter.
Labour cost inflation remained at or close to its cyclical lows, even as consumer price inflation increased in the last year, Mr Gordon said.
Statistics NZ figures showed the unemployment rate for men was 4.1%, the lowest rate since September 2008. The employment rate for women was 5.3%, up from 4.9% in the previous quarter. The unemployment rate for Maori was 9.9%, down from 10.6% a year ago.
Statistics NZ labour market and household statistics senior manager Diane Ramsay said the highest labour force participation on record reflected more people entering employment.
''This is in line with strong quarterly working-age population growth and near record-high annual net migration.''
The employment rate of 67.8% was the highest since the series began in 1986 and the employment rates for women reached a record high in the quarter.
Recent quarterly changes in employment levels had been volatile, reflecting New Zealand's dynamic labour market. But the trend series showed a steady increase, she said.
More than 85% of the growth in employment was from those employed full-time. And more than half the annual growth in employment came from those aged 25 to 39, up 53,200.
Asian, Maori and other ethnicities contributed most strongly to annual growth, Ms Ramsay said.
Professional, scientific, technical, administrative and support services jobs grew by 12%, or 34,400. Construction jobs were up 9.9%, or 22,300, and public administration and safety jobs rose 9.1%, or 12,500.
