- Diane Ramsay, labour market and households statistics manager
New Zealand's unemployment rate remained unchanged in the first quarter as the participation rate in the jobs market reached its highest level on record. The number of people in the workforce rose to an all-time high of 69.6%, while employment grew by an annual 3.2% to more than 2.3 million people. The seasonally adjusted jobless rate stood at 5.8%, according to Statistics New Zealand, against economists' expectations for a fall to 5.5%. The number of people employed increased 16,000 or 0.7% in the reported quarter, but this was more than soaked up by a surge in the workforce of 16,000 as the participation rate rose 0.2%.
New Zealand's population has been increasing due to an inflow of net migration, with fewer kiwis leaving, more expats returning, and new migrants arriving. That flood of new labour has kept wage inflation subdued as more people compete for jobs, while the growing economy has been able to soak up new workers. The labour cost index shows private sector wages climbed 0.3% in the first quarter, down from the 0.5% pace in December. That is the slowest pace since the March 2014 quarter. Annual wage inflation for the private sector remained unchanged at 1.8%. The data showed household income growth and consumer spending will remain strong through 2015, but that nominal wage inflation remains weak enough for the RBNZ to consider rate cuts later in the year.
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