Unemployment drops to 6pc

JAMES WEIR
Last updated 11:38 05/02/2014

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Unemployment was 6 per cent in the December quarter, according to Statistics NZ figures released today.

The figure was an improvement on the 6.2 per cent in the September quarter, and matched expectations of economists and the Reserve Bank.

The Wellington unemployment rate was steady at 6 per cent in the December quarter.

Canterbury's jobless rate was down to just 3.4 per cent, from 4.2 per cent in the September quarter.

Auckland's unemployment rate also improved, down to 6.3 per cent from 6.7 per cent three months before.

Most market watchers expected unemployment to tick down slightly in the latest quarter as the economy improved, despite the rapidly rising net immigration adding to the supply of workers. The Reserve Bank also expected an unemployment rate of 6 per cent, when it issued its December monetary policy statement.

Job numbers grew 0.4 per cent in the December quarter, in figures also out today.

Economists had also expected jobs growth of about 0.5 per cent in the December quarter, for an annual growth rate of about 2.4 per cent. In the September quarter, jobs grew 1.2 per cent and a repeat of that strong performance was not widely expected, despite business surveys showing firms planned to hire more staff.

Unemployment has bounced around between 6 per cent and 7 per cent in recent years. It has remained stubbornly high since the end of the global financial crisis, having shot up from a low of just 3.5 per cent at the end of 2007, a 20-year low.

During 2008 and 2009, the weak domestic economy saw job numbers flatten and then fall, with the unemployment rate rising quickly as a result.

The closely watched private sector Labour Cost Index was steady at 1.6 per cent.

It had been expected to rise 0.6 per cent in the December quarter, for an annual increase of 1.7 per cent.

However, Westpac economists had expected the recent low level of general inflation to see wage growth actually ease slightly to 1.5 per cent for the year.

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- Fairfax Media

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