New Zealand: The unemployment rate ticks up in Q2
August 1, 2018
Despite a marginal rise in unemployment in the second quarter, New Zealand’s labor market remains robust. The seasonally-adjusted unemployment rate ticked up from 4.4% in Q1—which had marked the lowest print in over nine years—to 4.5% in Q2, slightly overshooting the stable rate that market analysts had expected. The rise largely reflected the increase in the participation rate, which inched up from 70.8% in Q1 to 70.9% in Q2.
In a similar vein, the underutilization rate—which includes both unemployment and underemployment—rose slightly to 12.0% in Q2 from 11.9% in the previous quarter, suggesting that slack remains. Nevertheless, private sector wage growth, which has remained timid in recent years despite a tight labor market, picked up notably to 0.6% in Q2 on a quarter-on-quarter basis, up from 0.3% in Q1. Although part of the increase was due to the minimum wage hike earlier this year, there are signs that wage pressures are gradually building up.
Author: Javier Colato, Economist