The latest Household Labour Force Survey released by Statistics New Zealand yesterday, for the third-quarter to September, revealed seasonally adjusted employment rising 23,000 or 1% during the quarter to 2.19 million, while unemployment fell 6.1%, or down 10,000 people to 150,000.
In Otago for the quarter, employment numbers rose from 116,400 to 122,000, because of job gains in agriculture, forestry and fishing, retail, health care and social assistance.
Unemployment in the region fell from 4.7% to 3.6%.
ASB economist Jane Turner said the overall third-quarter result was "encouraging", as employment figures had increased 1%, much stronger than the market's expectation of a 0.5% increase. This brought the unemployment rate down to 6.4%; market expectations had been about 6.7%.
"The household labour force survey has been extremely volatile over the past year, which has made interpreting the underlying trend difficult," Ms Turner said.
Both the improved employment growth and unemployment rate suggested the economy had performed better than expected during the third quarter, but Ms Turner said that "to some degree" the results were likely to be "somewhat discounted by both the market and the Reserve Bank" given the unusual amount of volatility in the survey through the past year.
Earlier this week, Statistics New Zealand released separate data showing improved employment demand and a recovery in wages was under way. The labour-cost index of salary and wage rates, which includes overtime, grew 1.6% in the year to September, the same as the movement in the year to June.
The quarterly employment survey said the number of full-time equivalent employees rose by 1.6% compared with a year ago.
Ms Turner noted that earlier this year, markets' confidence in the economic recovery was buoyed by a surprising drop in unemployment, with a plunge from 7.3% to 6%. However, this rebounded the next quarter to 6.8%.
"Overall, the continued improvement in the labour market will start to feed through to stronger wage growth over the next year, and will underpin a recovery in consumer confidence," Ms Turner said.
ANZ chief economist Cameron Bagrie advised caution in considering the figures, citing recent volatility.
However, he also said that behind the scenes the numbers looked reasonably robust across the board.
Goldman Sachs economist Philip Borkin said there was a big uncertainty as to whether the survey was a true representation of the labour market. If it was, it would suggest the economy had turned, which boded well for 2011.
