New Zealand Unemployment Rate Rises To 4.3% In December 2018 Quarter

Data released by Statistics New Zealand showed that the unemployment rate rose to 4.3% which was higher than expected.

The fourth quarter unemployment rate scored higher compared to the revised unemployment rate of 4.0% during the third quarter. Previously, the unemployment rate had fallen to 3.9% marking a decade low during the third quarter.

New Zealand labor market summary

New Zealand unemployment rate

 

New Zealand labor market summary, December 2018. Source: Stats NZ

The median estimates polled by economists forecast that the unemployment rate would rise to 4.1% for the reported period.

Other data released included the quarterly employment growth rate. The employment change grew just 0.1% quarterly. This was a sharp decline compared to the 1.1% employment growth registered in the third quarter.

Economists were expecting to see the employment growth rise by 0.3% during the quarter.

Overall, the data simply reversed most of the gains from the previous quarter portraying that the jobs market perhaps slowed amid muted wage growth.

New Zealand’s labor force participation rate fell slightly to 70.5% from 71.1% previously. The underutilization rate rose to 12.1 percent in the December 2018 quarter, up from 11.4 percent in the previous quarter.

The labor market data comes ahead of this week’s monetary policy meeting from the Reserve Bank of New Zealand. Forecasts show that the RBNZ will be leaving its interest rates unchanged at record lows of 1.75%.

The soft jobs report and the number of hours worked potentially increases the risk of a weak GDP report for the December quarter.

The December quarter’s labor market report represents the jobs market for the year and shows that the labor market grew only so slightly while the unemployment rate was 0.2 percentage points below the previous year.

The labor cost index report showed a modest increase of 0.5% in the quarter while the annual growth was at 1.9%. The labor cost index (LCI) increased 1.9 percent on the year through the December 2018 quarter

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