New Zealand's Unemployment Rate Rises to 6.8%

New Zealand’s unemployment rate climbed by more than economists forecast in the second quarter., Bloomberg 8/5/2010 10:52:21 AM

The jobless rate rose to a seasonally adjusted 6.8 percent from 6 percent three months earlier, Statistics New Zealand said.

A higher unemployment rate is another sign domestic demand is subdued and the economy may not expand as quickly as the central bank expected. Governor Alan Bollard, who forecast a 6 percent rate, last month said the pace and extent of interest- rate increases may be more moderate than previously indicated.

The jobless rate partly reverses the fall to 6 percent in the first quarter from 7.1 percent three months earlier. There have been fluctuations in both employment and unemployment that occur during periods of major change in the labor market, Statistics New Zealand said. The underlying trend series for the jobless rate was unchanged at 6.7 percent, it said,

Companies hired fewer workers for the first time in three quarters, today’s report showed. Employment fell 0.3 percent, or about 6,000 jobs, from the first quarter, when it surged 1 percent or 22,000. Job creation lagged behind the 0.4 percent pace expected by economists and the 0.5 percent forecast by Bollard in June.

The report showed the labor force participation rate, which measures the proportion of the 3.4 million working-age population who are working or looking for work, was unchanged at 68 percent after the first-quarter reading was revised. The extra people who came into the labor force failed to find work. The number unemployed rose 19,000 or 14 percent to 159,000.

Full-time employment increased by 3,000 jobs or 0.2 percent from the first quarter. Part-time employment fell 7,000 or 1.6 percent. Statistics New Zealand adjusts the full-time and part- time employment figures separately, which means they may not add up to the total change in employment.

Total actual hours worked per week rose for a third quarter, gaining 0.6 percent.

New Zealand