The unemployment rate has been extremely low for months, placing pressure on many employers who simply cannot find staff. Photo / Supplied

Latest job numbers out: Unemployment flatlining near record lows

Author: NZ Herald ,
Publish Date: Wed, 2 Nov 2022, 10:55am

Average wages have surged in recent months but the latest unemployment stats show no relief after three months of nailbiting news about labour shortages.

Wages grew 2.6 per cent in the three months ending on September 30.

The September quarter stats have shed some light on whether any progress was been made addressing chronic staff shortages amid challenges from low immigration, inflation, and low population growth.

Many economists were expecting unemployment to fall back to record lows and wage growth to be near record highs.

Instead, the jobless rate stayed at 3.3 per cent.

Traditionally that would be good economic news. But with inflation increasingly entrenched in the economy, it is likely to stoke fears that the Reserve Bank will need to push rates even higher.

While the unemployment rate remained level, the underutilisation rate – a broader measure of spare labour capacity – dipped slightly to 9.0 per cent.

Last quarter, it was 9.2 per cent.

Over the year to September 30, wages rose at an annual rate of 7.4 per cent - faster than inflation at 7.2 per cent.

“Unemployment and underutilisation rates have been sitting at or near record lows for more than a year,” work and wellbeing statistics senior manager Becky Collett said.

Highest-ever labour force participation

The labour force participation rate rose to 71.7 per cent and the employment rate rose to 69.3 per cent.

Both are the highest rates recorded since the Household Labour Force Survey (HLFS) began in 1986.

Meanwhile, average ordinary time hourly earnings increased by 7.4 per cent in the year.

Inflation, as measured by the labour cost index (LCI), was 3.7 per cent, Stats NZ said today.

Average ordinary hourly earnings, as measured by the Quarterly Employment Survey (QES), increased to $37.86, an annual increase of $2.61 or 7.4 per cent.

“This is the largest annual rise in ordinary time hourly earnings since this series began in 1989,” international and business performance statistics senior manager Darren Allan said.

The LCI’s all salary and wage rates (including overtime) index rose by 3.7 per cent, the second highest annual increase since the series began in 1993.