New Zealand: Higher labor force participation drives up unemployment in Q4
February 2, 2017
New Zealand’s labor market remains solid despite higher unemployment. Statistics New Zealand reported that the unemployment rate rose from Q3’s almost eight-year low of 4.9% to 5.2% in Q4. Despite the increase, which surprised market analysts, the unemployment rate is just above the 5.0% benchmark of full employment in the economy. The figure is not indicative of slowing economic activity in the country but instead reflects a large influx of people entering the labor force due to strong net migration and a positive trend in participation by women and older workers in the economy.
According to Statistics New Zealand, the labor force participation rate rose from 70.1% in the third quarter to 70.5% in the final quarter of 2016. The number of employed workers increased by 0.8% in Q4 to reach 2.5 million people and the working-age population grew by 0.5% to 3.7 million. The economy added 19,000 new jobs in Q4, down from the 32,000 jobs created in Q3.