New Zealand Jobless Rate Steady In Q2, Employment Rises


– Unemployment rate in New Zealand remained unchanged during the June quarter after a slight decline in the previous quarter, Statistics New Zealand said Thursday. Meanwhile, employment recorded modest gains. The seasonally adjusted jobless rate was 6.5 percent in the June quarter, unchanged from the March quarter. The number of employed persons increased by 1,000 from the March quarter, while the number of unemployed persons stood at 154,000. Although key labor market indicators remained flat when compared with the March quarter, annual changes in the number of unemployed and employed show a continued strengthening of the labor market, industry and labor statistics manager Diane Ramsay said.

Annually, employment grew by 43,000 workers or 2 percent. Over the same period, the number of unemployed fell by 6,000 or 3.7 percent, the largest annual decrease since December 2007. The unemployment rate was 6.9 percent in the June quarter of 2010.Commenting on the data, Ban Jarman, an economist at J.P. Morgan said the data suggests that the volatility in the New Zealand labor market data is fading, and it sets a good base for acceleration in hiring as indicated by the business surveys in the third quarter. The statistical office also reported that the total actual hours worked rose 1.6 percent quarter-on-quarter compared to 0.2 percent decline in the previous quarter.

This was the largest increase since the June quarter of 2008. Annually, hours worked increased 1.8 percent. With hours worked being a useful leading indicator of employment intentions, the labor market seems well positioned for solid employment growth in coming quarters, Jarman said. During its most recent monetary policy meeting on July 27, the Reserve Bank of New Zealand left its benchmark Official Cash Rate unchanged at 2.50 percent. However, Governor Alan Bollard said that the Bank sees little need for the March’s “insurance” cut to remain in place much longer, provided current
global financial risks recede and the economy continues to recover.On the other hand, if the current very high value of the New Zealand dollar persists, it is likely to reduce the need for further OCR increases in the short term, he added.Referring to the latest employment data, Jarman said there is nothing in this report to make the RBNZ step back from their clearly phrased intention to withdraw the 50 basis points of earthquake “insurance” accommodation at the next meeting in September. “Rather, the risks to that view lie offshore, as European sovereign concerns escalate again while global growth prospects continue to be marked down,” the economist added.