Average wages have surged in recent months but the latest unemployment stats show no relief after three months of nailbiting news about labour shortages.
Wages grew 2.6 per cent in the three months ending on September 30.
The September quarter stats have shed some light on whether any progress was been made addressing chronic staff shortages amid challenges from low immigration, inflation, and low population growth.
Many economists were expecting unemployment to fall back to record lows and wage growth to be near record highs.
Instead, the jobless rate stayed at 3.3 per cent.
The biggest leap ever recorded in average hourly earnings occurred over the year to September 30.
Average ordinary hourly earnings, as measured by the Quarterly Employment Survey (QES), increased to $37.86, an annual increase of $2.61 or 7.4 per cent.
“This is the largest annual rise in ordinary time hourly earnings since this series began in 1989,” international and business performance statistics senior manager Darren Allan said.
The LCI’s all salary and wage rates (including overtime) index rose by 3.7 per cent, the second highest annual increase since the series began in 1993.
Job security feelings up
Feelings of job security rose in the September 2022 quarter, with 52.8 per cent of employed people - who were able to assess their job security - saying there was almost no chance they’d involuntarily lose their job or business in the next 12 months.
This time last year, only 45.6 per cent of people felt that secure.
“Strong feelings of job security coincided with increasing numbers of people working in permanent roles,” Collett said.
Over the year, there were 46,100 more permanent employees and 12,400 fewer fixed-term employees (not seasonally adjusted) in the labour force.
Highest-ever labour force participation
The labour force participation rate rose to 71.7 per cent and the employment rate rose to 69.3 per cent.
Both are the highest rates recorded since the Household Labour Force Survey (HLFS) began in 1986.
Meanwhile, average ordinary time hourly earnings increased by 7.4 per cent in the year.
Inflation, as measured by the labour cost index (LCI), was 3.7 per cent, Stats NZ said today.
The low unemployment rate would traditionally be good economic news. But with inflation increasingly entrenched in the economy, it is likely to stoke fears that the Reserve Bank will need to push rates even higher.
While the unemployment rate remained level, the underutilisation rate – a broader measure of spare labour capacity – dipped slightly to 9.0 per cent. Last quarter, it was 9.2 per cent.
Over the year to September 30, wages rose at an annual rate of 7.4 per cent - faster than inflation at 7.2 per cent.
“Unemployment and underutilisation rates have been sitting at or near record lows for more than a year,” Stats NZ work and wellbeing statistics senior manager Becky Collett said.
“This data reflects currently strong labour market demand. The underemployment rate, which captures those who want more work but can’t get it, fell to 9%. This is the lowest rate for around 15 years. Labour force participation rose to its highest level since 1986, and New Zealand’s employment rate is the third highest in the OECD. 41,600 more people are in permanent work than a year ago.”
The Council of Trade Unions said public sector wages ose at roughly half the rate found in the private sector.
The NZCTU said wage growth in the accommodation and food services sectors was at 11.8 per cent annually.
Jobs in rental and real estate and professional services also registered jumps esceeding 10 per cent.
But workers in public administration and safety only had average wage increases of 4.1 per cent, well belowe the inflation rate.
The NZCTU said people employed in the education and training sector only had an average increase of 2.1 per cent.
We can’t keep expecting our public service workers to bear the costs of inflation, without eventually losing skills and talent to the private sector where pay is rising much faster,” NZCTU Economist Craig Renney said.