By Lucy Craymer
WELLINGTON (Reuters) – New Zealand’s jobless rate rose slightly in the second quarter from the previous quarter as more people entered the work force and wage inflation eased off three-decade highs.
The unemployment rate increased to 3.6% in the June quarter from 3.4% in the March quarter and was slightly higher than a forecast 3.5% by economists, Statistics New Zealand data showed on Wednesday.
Statistics New Zealand said the labour force participation rate at 72.4% and the employment rate at 69.8% were both the highest rates recorded since the survey began.
For the year to June 2023, the working age population increased by 91,000.
New Zealand has experienced strong migration in the past 12 months after reopening its borders following COVID-19, but Statistics New Zealand said recently most of the growth in the working age population had come from those within New Zealand.
Wage growth started to ease in the quarter although it remains historically high. The private sector labour cost index (LCI) excluding overtime recorded a 4.3% lift on year and came in slightly below the forecast 4.4% increase.
New Zealand’s minimum wage rose in April but Statistics New Zealand said this only accounted for a relatively small proportion of pay increases overall, with most respondents citing factors such as cost of living, matching market rates and retaining staff as reasons for increasing wages.
Ongoing strength in the jobs market will remain a relief for the Reserve Bank of New Zealand (RBNZ), which has previously said that strength in the employment market was cushioning the impact of high mortgage rates.
The central bank has taken an aggressive tightening path to dampen inflation, which has pushed the country into a technical recession but the impact of this has been softened by rising wages and job security.
(Reporting by Lucy Craymer; Editing by Sandra Maler and Sonali Paul)
