New Zealand's Unemployment Rate Falls to Record Low

New Zealand's jobless rate fell to a record low as companies hired more workers than forecast, reinforcing prospects the central bank won't cut interest rates., Bloomberg 2/6/2008 4:07:59 PM

The unemployment rate dropped to 3.4 percent in the final quarter of 2007 from 3.5 percent in the previous three months, Statistics New Zealand said in Wellington today, citing seasonally adjusted figures. Businesses added 23,000 workers in the quarter, almost four times the pace forecast by economists.

Declining unemployment may drive a further pickup in wages that already are increasing at the quickest pace on record, adding to price pressures in the economy. Reserve Bank Governor Alan Bollard last month cited the strength in the labor market as a source of inflation and a reason for leaving the official cash rate at an all-time high of 8.25 percent.

New Zealand's dollar climbed to 78.70 U.S. cents at 11:17 a.m. from 78.53 cents immediately before the report.

New Zealand's jobless rate is among the lowest in the Asia- Pacific region. It compares with 4.3 percent in Australia, 3.8 percent in Japan and 4 percent in China.

The participation rate, which measures the proportion of the population working or seeking employment, rose to a record 68.8 percent from 68.3 percent in the third quarter.

The number of people working or seeking work increased 21,000 to 2,249,000, outpacing the growth in the working age population. The number of people not looking for work or unavailable to work fell 13,000. Total actual hours worked increased 0.8 percent from the third quarter.

Full-time employment rose by 26,000 jobs, or 1.6 percent, in the fourth quarter after seasonal adjustments. Full-time jobs increased 1.5 percent from a year earlier.

Part-time employment declined by 2,000 jobs, or 0.2 percent, in the quarter. It rose 6.1 percent from a year ago. Statistics New Zealand adjusts the full- and part-time employment figures separately which means they may not add to the total change in employment.

New Zealand