The unemployment rate moved in the opposite direction of the central bank’s forecast.
The official unemployment rate rose to 3.4 percent in the December quarter, and wages do not appear to have risen as much as some economists had expected.
The rise in unemployment was small, from 3.3 percent in the September quarter, but in the opposite direction to what many banks and the central bank had expected.
This comes amid predictions of a recession this year.
The data is likely to bolster expectations that the central bank will agree to a 50 basis point increase in the official cash rate when it issues its next monetary policy statement on February 22, rather than another 75, said Jeremy Couchman, chief economist at Kiwi Bank. slow
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The central bank, ANZ and ASB had forecast the official unemployment rate to fall to 3.2%.
The central bank also indicated last week that it had overestimated likely inflation, when December quarter inflation was flat at 7.2 percent, down from the 7.5 percent forecast it made in November.
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Stats NZ reported that the labor underutilization rate, a broader measure of underemployment in the economy, rose to 9.4 percent from 9 percent in the previous quarter.
However, it noted that this was mainly due to an increase in the proportion of people who said they were available for work, rather than an actual change in the proportion of people working or wanting to work more hours.
The official unemployment rate is based on the Stats NZ survey. To count, individuals must have been actively looking for work in the past four weeks.
The proportion of New Zealanders in employment remains at 69.3%, the highest recorded since it was first measured in 1986.
Average typical hourly earnings rose 7.2 percent in the year to mid-October, according to quarterly employment survey data, down from a 7.4 percent annual growth in the previous quarter.
Becky Collett, director of labor and welfare statistics, noted that it was still the second highest jump since Stats NZ started the survey in 1986.
However, the reduction could be offset by the expected increase in OCR.
Average hourly earnings in normal time in the private sector rose 8.1 percent to $36.43, short of ANZ’s forecast for a 9.1 percent jump.
Overall, wage growth was “a bit weaker than expected,” Kochman said.
But he said there was still a chance it would peak in the current quarter, given the lag that often exists between inflation and payments.
The labor market remained relatively tight, he said, despite a slight drop in official unemployment.
The Labor Cost Index, an attempt by Stats NZ to measure labor quality-adjusted cost, rose 4.1 per cent, up from annual growth of 3.7 per cent in the previous quarter.