WELLINGTON, Nov 5 (Reuters) - New Zealand's jobless rate rose
to a nine-year high in the third quarter as the labour market
showed the impact of the long recession, backing views the
central bank will keep interest rates at a record low well into
2010.
The unemployment rate rose to 6.5 percent, its highest since March 2000 quarter, from 6.0 percent in the previous quarter, according to official data released on Thursday.
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KEY POINTS:
- Employment fell 0.8 percent s/adj (forecast 0.3 percent fall), or 17,000 jobs.
- Unemployment rate 6.5 percent adj (forecast 6.4 percent), the number of unemployed at a 15-year high.
- Participation rate 68.0 percent (forecast 68.2 percent), lowest since the March 2008 quarter.
- Click on for a table of the main figures.
COMMENTARY:
DARREN GIBBS, CHIEF ECONOMIST, DEUTSCHE BANK 'Unemployment didn't rise by the amount I thought likely because we saw a reduction in labour force participation which is not exactly a positive story.'
'Relative to the market it's a little bit on the down side but the good news is the forward-looking indicators are much improved over recent months, and we're on course for an unemployment rate that will stabilise at around 7 percent, before declining from the middle of next year.'
'A little weaker than the RBNZ had but nothing dramatic or surprising there.'
MARKET REACTION:
- The New Zealand dollar fell as much as half a cent after the data to a low of $0.7215 after the data, before trimming its losses to settle around $0.7240/50. The yield on bank bill futures fell after the data as investors trimmed rate hike expectations.
LINKS:
- The Statistics New Zealand Web site is: www.statistics.govt.nz
- For all New Zealand news and data, 3000 Xtra users can click on
BACKGROUND:
- New Zealand's unemployment rate has risen with businesses shedding jobs as a result of the recession, which the economy emerged from unexpectedly in the three months to June 30.
- The Reserve Bank of New Zealand last week held interest rates at a record low 2.5 percent, and said it was no hurry to raise rates, which it expected to keep at their current level until the second half of 2010. It has forecast unemployment to peak at 6.8 percent in the year to March 2010.
- The NZ Institute of Economic Research's third quarter survey of business opinion showed hiring intentions have improved while a net 29 percent had reduced staff in the previous quarter.
- NZ wages grew at their slowest pace in eight years in the third quarter and the jobs market remained weak.
- Finance Minister Bill English said on Wednesday NZ's unemployment will not reach the level forecast previously as the economy emerges from recession. The last Treasury forecast was for the jobless rate to peak around 7.5 percent next year.
((Wellington newsroom tel 64 4 471 4234, fax +64 4 4736 212, wellington.newsroom@reuters.com Keywords: NEWZEALAND ECONOMY/JOBS (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The unemployment rate rose to 6.5 percent, its highest since March 2000 quarter, from 6.0 percent in the previous quarter, according to official data released on Thursday.
***************************************************************
KEY POINTS:
- Employment fell 0.8 percent s/adj (forecast 0.3 percent fall), or 17,000 jobs.
- Unemployment rate 6.5 percent adj (forecast 6.4 percent), the number of unemployed at a 15-year high.
- Participation rate 68.0 percent (forecast 68.2 percent), lowest since the March 2008 quarter.
- Click on for a table of the main figures.
COMMENTARY:
DARREN GIBBS, CHIEF ECONOMIST, DEUTSCHE BANK 'Unemployment didn't rise by the amount I thought likely because we saw a reduction in labour force participation which is not exactly a positive story.'
'Relative to the market it's a little bit on the down side but the good news is the forward-looking indicators are much improved over recent months, and we're on course for an unemployment rate that will stabilise at around 7 percent, before declining from the middle of next year.'
'A little weaker than the RBNZ had but nothing dramatic or surprising there.'
MARKET REACTION:
- The New Zealand dollar fell as much as half a cent after the data to a low of $0.7215 after the data, before trimming its losses to settle around $0.7240/50. The yield on bank bill futures fell after the data as investors trimmed rate hike expectations.
LINKS:
- The Statistics New Zealand Web site is: www.statistics.govt.nz
- For all New Zealand news and data, 3000 Xtra users can click on
BACKGROUND:
- New Zealand's unemployment rate has risen with businesses shedding jobs as a result of the recession, which the economy emerged from unexpectedly in the three months to June 30.
- The Reserve Bank of New Zealand last week held interest rates at a record low 2.5 percent, and said it was no hurry to raise rates, which it expected to keep at their current level until the second half of 2010. It has forecast unemployment to peak at 6.8 percent in the year to March 2010.
- The NZ Institute of Economic Research's third quarter survey of business opinion showed hiring intentions have improved while a net 29 percent had reduced staff in the previous quarter.
- NZ wages grew at their slowest pace in eight years in the third quarter and the jobs market remained weak.
- Finance Minister Bill English said on Wednesday NZ's unemployment will not reach the level forecast previously as the economy emerges from recession. The last Treasury forecast was for the jobless rate to peak around 7.5 percent next year.
((Wellington newsroom tel 64 4 471 4234, fax +64 4 4736 212, wellington.newsroom@reuters.com Keywords: NEWZEALAND ECONOMY/JOBS (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2009 AFX News
