The unemployment rate rose in the December quarter but not by as much as the market had expected.
New data from Stats NZ today shows the unemployment rate was 4 percent in the December 2023 quarter, compared with 3.9 percent in the previous quarter.
The market expectation was for a rise to 4.3 percent.
That is likely to be interpreted by the Reserve Bank as a sign that the economy is holding up better than expected and could increase pressure to hold interest rates at current levels for longer.
The unemployment rate rose 0.6 percentage points over the year, up from 3.4 percent in the December 2022 quarter.
“Unemployment rates have returned to 2019 levels, following recent historic lows,” work and wellbeing statistics senior manager Becky Collett said.
“Low unemployment formed part of the unique economic period from 2021 to 2022, as restricted borders limited increases to labour supply and labour demand remained high.”
The number of unemployed people rose to 122,000 (up 3000).
In the minutes following the release, the New Zealand dollar rallied to US60.91c from US60.79c. In interest rates, the two-year swap rate jumped to 4.93 percent from 4.89 percent.
The labour cost index (LCI) salary and wage rates (including overtime) increased 4.3 percent in the year to the December 2023 quarter. This increase was the same annual percentage change recorded by the LCI in the March, June, and September 2023 quarters.
Average ordinary time hourly earnings, as measured in the Quarterly Employment Survey (QES), increased by 6.9 percent over the year to reach $40.84.
Average weekly earnings (including overtime) for fulltime equivalent employees (FTEs) in the QES also increased – up 6.1 percent over the year to the December 2023 quarter to reach $1588.
For men, the unemployment rate was 3.7 percent, compared with 3.8 percent last quarter. For women, the unemployment rate was 4.3 percent, compared with 4.1 percent last quarter.
The seasonally adjusted employment rate was 69.0 percent, compared with 69.2 percent last quarter.
