Unemployment has stayed at a record low, while wages have risen at their fastest rate in a decade.
The jobless rate was unchanged at 3.2 percent for the three months ended March, the lowest since records started in the mid-1980s. Photo: 123rf
Official numbers show the jobless rate held steady at 3.2 percent for the three months ended March, in line with expectations.
The underutilisation rate, which is a measure of the slack in the labour market, lifted marginally to 9.3 percent, but underemployment - those wanting to work more hours - fell.
"Quarterly increases in underutilisation levels came primarily from growth in available potential jobseekers - those who want and are available to work, but not currently looking," Stats NZ senior manager Becky Collett said.
The data was in line with expectations for a steady unemployment rate, modest job growth, but a solid lift in wages.
The economy gained about 2,000 jobs during the quarter and there were few changes to the make up of the market between full time and part time work, and employment rates for various groups.
The strongest element of the data was the growth in wages with private sector, excluding overtime, annual wage growth rising 3.1 percent - the highest level since early 2009.
However, that remained less than half the rise in consumer prices, which increased 6.9 percent in the same period.
"Wage increases have typically exceeded consumer price increases over the past ten years," Stats NZ prices manager Bryan Downes said.
Minister of Finance Grant Robertson claimed government policies to counter the pandemic and support the economy could be credited for the strong labour market.
"This is very positive result in what has been a challenging environment. It is a sign of confidence in the economy and the government's strong health response and sound economic management."
However, National's finance spokesperson Nicola Willis said government "economic mismanagement" had exacerbated the growing gap between wages and prices.
"More and more Kiwis are falling behind each week, squeezed by growing costs and a government that refuses to offer them income tax relief."
Jarden Securities economist John Carran said the labour market remained stretched and the strength of wage inflation would mean more Reserve Bank interest rate rises.
"We expect the RBNZ will raise the official cash rate a further 0.5 percent to 2.0 percent when it meets later this month as it seeks to dampen near-term inflation and peoples' inflation expectations."
But he added the economy was set to soften later this year, which would likely make the RBNZ more cautious about future rate rises.
The Reserve Bank has a mandate of maximising sustainable employment, as well keeping inflation in check at around 2 percent.