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NZ jobless rate falls to 4.9pc in Q1

NZ Newswire logoNZ Newswire 3/05/2017 Rebecca Howard

New Zealand's unemployment rate fell more than expected in the first quarter.

However the continuing influx of migrants meant the labour force participation rate reached a fresh all-time high and wage inflation remained muted, data from Statistics New Zealand shows.

The unemployment rate fell to 4.9 per cent in the three months ended March 31 from 5.2 per cent in the December quarter, Statistics New Zealand said.

Economists had been expecting the unemployment rate to be 5.1 per cent.

Employment grew 1.2 per cent in the quarter to 2.54 million while the working-age population grew 0.7 per cent to 3.78 million. Economists had tipped a 0.8 per cent rise in employment in the quarter.

The participation rate was an all-time high of 70.6 per cent as the working-age population continued to be bolstered by record migration.

Accommodation and food services and construction drove the increase in the jobs and Stats NZ said construction employment was starting to build in areas other than Auckland and Canterbury.

Over the quarter, the nation's largest city of Auckland showed relatively flat job growth and Waikato was the only region that had strong job growth with a "significant increase of people in the construction industry," Stats NZ said.

New Zealand's swelling population means, however, any wage increases remained muted, adding to the challenges facing New Zealand's central bank.

While inflation is finally back in the central bank's 1 per cent-to-3 per cent target band, the lack of wage inflation is one factor that will likely continue to see interest rates on hold for some time to come.

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