-Cameron Bagrie, ANZ
New Zealand's unemployment rate rose unexpectedly from its eight-year low in the last quarter of 2016 as more people entered the labour force, a quarterly employment report revealed on Tuesday. Statistics New Zealand reported the jobless rate climbed to 5.2% in the Q4, up from the preceding quarter's 4.9%, while market analysts anticipated a slight drop to 4.8% during the reported period. Meanwhile, employment accelerated 0.8% to 2.51 million on a quarterly basis in the three month period to December 2016, following the previous quarter's downwardly revised gain of 1.3% and meeting analysts' expectations. Furthermore, the working-age population grew 0.5% to 3.76 million, whereas the participation rate hit its all-time high of 70.5%. Over the last few years, the key driver of the working age population growth in New Zealand were high levels of migration. Statistics New Zealand also said wage inflation, which includes the private and public sectors, grew 1.6% on a yearly basis in the Q4 after being unchanged at 1.5% for the last seven quarters. Moreover, the underutilisation rate or inactivity of labour in the New Zealand economy dropped 0.5% to 12.2% in the reported period. After the release, the New Zealand Dollar improved markedly its position on the market, rising above 0.7225 against its US counterpart.
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