New Zealand unemployment rate falls below 5 pct for first time since 2008, growth in wages remains muted

The unemployment rate in New Zealand fell below 5 percent for the first time since the financial crisis in 2008, although that failed to hike wages at a faster rate.

The jobless rate in New Zealand came in at 4.9 percent in the third quarter of 2016, data released by Statistics New Zealand showed Wednesday, beating forecasts for 5.1 percent, which would have been unchanged from the three months prior.

The employment change was 1.4 percent on quarter, beating expectations for 0.5 percent after rising 2.4 percent in Q2. On a yearly basis, the employment change was 6.1 percent, again topping estimates for 5.4 percent and up from 4.5 percent in the previous three months.

Further, the participation rate came in at 70.1 percent, exceeding expectations for 69.7 percent, which would have been unchanged, with the size of the working-age population rising by 0.7 percent.

However, wage inflation remained muted, with the ordinary time private sector labor cost index increasing 0.4 per cent in the quarter, unchanged from the previous quarter, and in line with economists' expectations. Public sector wages rose 0.7 per cent in the quarter, due largely to new collective agreements for nurses, primary teachers and police.

"This strong growth in employment, coupled with fewer unemployed people, pushed the unemployment rate below 5 per cent for the first time in nearly eight years," said Mark Gordon, Labour and Income Statistics Manager, New Zealand.