NZ unemployment rate lowest in developed world

In the strongest job market for a generation, the unemployment rate has fallen to 3.6 per cent, the lowest among developed countries and the lowest since comparable records began 19 years ago.

In the last three months of 2004 the economy created 33,000 new jobs. Over the year, 87,000 jobs were created, Statistics New Zealand reported yesterday.

The number of people in work increased 4.4 per cent last year, at the same time as the net inflow of migrants dwindled and growth in the population slowed accordingly.

That is the strongest jobs growth for 10 years and its benefits are being felt by sectors of the community which sometimes struggle to find employment - people over 55, the long-term unemployed, women and Maori, all of whose employment statistics have improved.

In the latest quarter, employment jumped by 1.6 per cent, a record. The increases were strongest in the service sectors - health, education and business and financial services.

The number of unemployed fell to 76,000, down from 79,000 in September and 94,000 a year ago.

But most of the increase in employment came from people previously considered not in the labour force. To count as a member of the labour force you have to be employed or available for work and actively seeking it.

Most of the increase in employment in the December quarter was among people under 24 and over 55.

"It would appear that more so than normal employers have turned to holidaying students to fill the gap between labour supply and demand," said Westpac economist Donna Purdue.

The problem is that when the academic year resumes that source of workers will reduce again.

Most of the growth in the latest quarter was in part-time jobs, a break from the pattern of previous quarters. That may be more a matter of necessity than choice from an employer's point of view.

ANZ chief economist Dr John McDermott said: "The intensity with which employers are searching for labour is very strong.

"We see that in the high levels of job ads. And there is a lot of evidence that employers are thinking about alternatives like job sharing.

"There are a lot of experienced and qualified women out there who can't work full-time because of other commitments."

Business New Zealand chief executive Phil O'Reilly and Employers and Manufacturers Association chief executive Alasdair Thompson agreed that some of the increase in part-time employment reflected employers becoming more flexible in their requirements in the face of such a tight market.

Council of Trade Unions president Ross Wilson said it was time to focus on improving the quality of the workforce by "upskilling" and investment in training.

Auckland's unemployment rate is below the national average at 3.3 per cent.

Coming on top of evidence of a second wind in the housing market, yesterday's figures increase the risk of another round of interest rate rises, but most economists think Reserve Bank Governor Dr Alan Bollard will keep his nerve and leave rates on hold.

The job figures are reflected in the advertising pages of the Herald, whose sales director, Ken Leeming, said yesterday that the traditional post-Christmas settling-down period did not occur this year.

"It's the biggest it has been in recent history, if not all history," he said of the thousands of jobs advertised in the newspaper.