Unemployment falls to 20-year low

The unemployment rate tumbled to a 20-year low of 3.6 per cent in the December quarter, Statistics New Zealand announced today.

The rate in the September quarter was 3.8 per cent.

SNZ said New Zealand now had the lowest rate in the Organisation for Economic Co-operation and Development (OECD) club of rich nations, overtaking South Korea.

The figure is the lowest since SNZ began compiling the Household Labour Force Survey 18 years ago. However, New Zealand Institute of Economic Research data going back 50 years shows the rate is the lowest since September 1985.

The low unemployment rate was fuelled by strong jobs growth -- up 1.6 per cent in the quarter. That is the strongest job growth in any quarter since the series was calculated.

A net 30,000 extra jobs were created during the December quarter and some 87,000 over the year.

The number of those unemployed fell to 76,000 from 79,000 in the September quarter against 94,000 in the December 2003 quarter.

The labour force participation rate rose from 67.0 in the September quarter to a record 67.7 per cent.

Prime Minister Helen Clark said when opening Parliament this year that raising the participation rate by getting more women in work was a Government goal as part of the effort to lift living standards.

While most of the new jobs were part-time, today's figures showed 14,000 extra women got new part times jobs during the December quarter against 8000 men.

The female work participation rate rose to a record 60.8 per cent from 59.9 per cent in the September quarter. By comparison the male rate rose to 75.1 per cent from 74.5 per cent.

Today's news may have a dark side. The Reserve Bank may look to quell the rampant jobs market by lifting interest rates when it next reviews them.

BNZ economist Craig Ebert believes that with the strong jobs growth figures there is an even chance the bank will act on March 10.

Female employment rose 1.8 per cent in the quarter against 1.4 per cent for men.

The Maori unemployment rate actually went up quite sharply -- to 8.9 per cent from 8.3 per cent in the September quarter.

The rate for Pacific peoples fell to 6.5 per cent from 7.7 per cent while the pakeha rate fell to 2.3 per cent from 2.6 per cent.

The Gisborne/Hawke's Bay region had the worst unemployment rate, but this fell to 4.6 per cent from 5.0 per cent in the September quarter.

The lowest rate was in the Tasman, Nelson, Marlborough, West Coast region with a rate of 2.3 per cent.

The Auckland rate fell to 3.3 per cent from 3.8 per cent.

- NZPA