New Zealand's jobs market remains resilient with just a small uptick in the unemployment rate to four per cent.
Stats NZ released new data on Wednesday showing the jobless rate rose from 3.9 per cent in September quarter last year to 4.0 per cent in the December quarter, below market expectations.
It is the first time New Zealand's unemployment rate starts with a four, rather than a three, in two-and-a-half years.
"Unemployment rates have returned to 2019 levels, following recent historic lows," Stats NZ spokeswoman Becky Collett said.
"Low unemployment formed part of the unique economic period from 2021 to 2022, as restricted borders limited increases to labour supply and labour demand remained high."
Stats NZ also released its quarterly employment survey on Wednesday, showing average ordinary-time hourly earnings jumped by 6.9 per cent last year, including public sector wages up 7.4 per cent.
The labour cost index (LCI) showed all salary and wage rates (including overtime) for the public sector increased 5.7 per cent - the highest rate on record.
"Recent growth in public sector earnings follows a period of pay restraint between April 2020 and March 2023 as a response to the impact of COVID-19," Stats NZ spokeswoman Sue Chapman said.
Market expectation was for a higher jobless figure, with ASB Bank chief economist Nick Tuffley tipping 4.3 per cent, partially due to immigration.
New Zealand added a huge number of migrants last year, with roughly 250,000 arriving and just over 100,000 going the other way.
Mr Tuffley said the "monsoon of people" would both grow unemployment and slow wage growth - one of the driving forces behind higher-than-desired inflation.
"We estimate over 2023 we probably had around 90,000 extra people available wanting to work and we didn't quite create the jobs," Mr Tuffley told Newstalk ZB.
Kiwibank and the Reserve Bank both tipped 4.2 per cent unemployment, while Treasury predicted 4.1 per cent.
Kiwibank chief economist Jarrod Kerr said the employment report was "stronger than expected but is still softening".
"The underutilisation rate also lifted over the quarter, rising to 10.7 per cent from 10.4 per cent. More people need more hours but employers are not as keen," he said.
Mr Kerr said overall, the data would reduce the likelihood of a near-term rate cut by the Reserve Bank, which has left the official cash rate at 5.5 per cent since May last year.
"Thoughts of cuts in May and August will likely push out to November," he said.
All projections are that unemployment will continue to climb with Treasury forecasting a jobless rate of 5.2 per cent early next year.
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