The number of people out of work has hit a 10-year low, as the economy created more jobs and more people found work.
Christchurch construction. Photo: RNZ / Alexander Robertson
Official figures show the unemployment rate fell to a seasonally adjusted 3.9 percent in the three months ended September from 4.4 percent in the previous quarter.
The numbers, which are often volatile and revised, were much stronger than expected.
"Labour market measures tend to lag behind other economic indicators, which have shown strong and widespread growth in 2018. We've seen population growth in the regions, reports of more job ads, high levels of migration and tourism, growing retail sales, and rising exports," Stats NZ senior manager Jason Attewell said.
The number looking for work or underemployed fell by 13,000 to 109,000, while the economy created 29,000 jobs in the three months ended September. The proportion of the workforce in employment is near record highs.
The number of women and young people out of work fell sharply, driving the overall rate lower.
The strongest job growth for the quarter was in Taranaki, Hawke's Bay, and Otago, which were nearly double the rate in the main cities.
Utilities, construction, retail, health and recreation services recorded the strongest job growth.
The underutilisation rate, which measures the number of people working who are seeking more hours, fell to 11.3 percent.
Wage growth remained subdued, rising 1.9 percent, with the biggest rises occurring from pay equity settlements.
The strength of the numbers was seen dampening the chances of a cut in interest rates by the Reserve Bank, which has a mandate to support maximum employment.
"On the basis of today's figures the hurdle to an official cash rate cut (OCR) has certainly increased. The next move in the OCR is likely up, but not until concrete signs of firming wage inflation emerge, which looks to be 2020," ASB chief economist Nick Tuffley said.
The strength of the data caused the New Zealand dollar to jump half a cent against the US and Australian dollars.