New Zealand Jobless Rate Rises to 7.3%

New Zealand’s unemployment rate soared to the highest level in more than 10 years in the fourth quarter as a slow recovery from recession made companies reluctant to hire extra workers., Bloomberg 2/3/2010 5:18:24 PM

The jobless rate increased to 7.3 percent from 6.5 percent in the previous three months, Statistics New Zealand said.

Total actual hours worked per week declined for a sixth quarter, dropping 0.4 percent to the lowest level in more than five years, report showed.

Employment declined 0.1 percent or about 2,000 jobs in the fourth quarter, matching economists’ median expectation,  report showed. Employment shrank 2.4 percent from a year earlier.

The number of people out of work rose 18,000 from the third quarter to a 16-year high of 168,000. About 2.3 million of New Zealand’s 4.4 million people are in the workforce.

The participation rate, which measures the proportion of the working age population employed or seeking employment, rose to 68.1 percent from 68 percent in the third quarter, matching analysts’ median expectation.

Full-time employment fell by 6,000 jobs, or 0.3 percent, in the fourth quarter after seasonal adjustment. Part-time employment was unchanged. Statistics New Zealand adjusts the full-time and part-time employment figures separately, which means they may not add up to the total change in employment.

The rising unemployment rate removes pressure on employers to pay higher wages and eases inflation.

Companies such as Fisher & Paykel Appliances Holdings Ltd., the nation’s largest maker of refrigerators and washing machines, last year took advantage of government subsidies to work a nine- day fortnight and save about 60 jobs.

Companies are optimistic about the economy’s recovery in the next six months, although most expect profits will fall in the first quarter, according to a New Zealand Institute of Economic Research Inc. survey published last month.

The number of firms expecting to hire workers in the first quarter barely exceeded the number planning to reduce staff, the Wellington-based institute said.

The Reserve Bank expects the economy will grow 3.1 percent this year after contracting 1.4 percent in 2009. Employment may increase about 0.6 percent this year, it said.

New Zealand Jobless Rate Rises to 7.3%