New Zealand Unemployment Q4 2017

New Zealand

New Zealand: The unemployment rate declines further in Q4

February 6, 2018

New Zealand’s labor market continued to strengthen in Q4. The seasonally adjusted unemployment rate dipped from 4.6% in the third quarter to 4.5%, the lowest figure since 2008 and beating market expectations of 4.6%. The dip was driven partly by a rise in employment of 12,000 quarter-on-quarter, a moderation from 56,000 in Q3. But the decline was also influenced by a lower participation rate, as some workers left the labor force.

Although the multi-year low unemployment rate suggests a tight labor market, the underutilization rate—which encompasses both unemployment and underemployment—remains elevated at 12.1%, which is a sign that slack persists. This is probably why earnings growth is still muted, with recent figures showing wage inflation in the fourth quarter was 1.8%. The labor market could need to tighten further towards the levels seen before the 2008 financial crisis in order for a substantial pickup in wage pressure to occur.

FocusEconomics Consensus Forecast panelists expect the unemployment rate to average 4.6% in both 2018 and 2019.


Author:, Economist

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New Zealand Unemployment Chart


NewZealand Unemployment Q4 2017

Note: Quarter-on-quarter seasonally adjusted and annual variation of retail sales in %.
Source: Statistics New Zealand and FocusEconomics calculations.


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