New Zealand: Labor market strengthens in Q1; labor force increase is the largest since 2004
May 4, 2016
The strengthening of New Zeeland’s labor market observed in the last quarter of 2015 carried over into the first quarter of this year. The economy added 28,000 new jobs in Q1, which followed the 22,000 job gain registered in Q4. The print marked the strongest job creation since Q3 2013.
The statistical office also reported that the unemployment rate increased to 5.7% in Q1 from a revised 5.4% in Q4 (previously reported: 5.3%). According to analysts, the jump in the unemployment rate is mainly the result of a strong increase in the labor force. The statistical office reported that the labor force increased by 38,000 persons and reached 2.5 million persons in Q1. The increase—a 1.5% over the previous quarter—marked the fastest since Q4 2004.
The interpretation of the data is that the labor market in New Zealand remains rock solid despite recent concerns regarding the dairy sector. Moreover, the labor force continues to increase due to strong net immigration, on top of the positive trend in the participation by women and older workers.
Author: Ricardo Aceves, Senior Economist