NZ jobless rate surges to 4.6%

Thursday 5th February 2009

New Zealand's unemployment rate surged to a six-year high as the prolonged recession spurred companies to eliminate jobs and hold off on hiring to reduce costs.

The jobless rate rose to 4.6% in the fourth quarter, from 4.2% in the previous three months, according Statistics New Zealand's Household Labour Force Survey. The participation rate climbed to 69.3% from 68.7% three months earlier. The New Zealand dollar edged up to 50.72 US cents after the report from 50.64 cents immediately before as the jobless rate was lower than the 4.7% rate forecast in a Reuters survey.

Economists are predicting the unemployment rate will climb to 7% or higher through 2009 as the global economic downturn slows demand for New Zealand's exports and tourist destinations. Reserve Bank Governor Alan Bollard slashed the official cash rate by 150 basis points to 3.5% on January 29 and said there's room for further, smaller cuts as inflation dissipates.

New Zealand consumer confidence has sunk to a 10-year low, according to a survey by UMR Research released this week. Government figures showed wages growth for non-government workers rose a lower-than-expected 0.7% in the fourth quarter, excluding overtime. Telecom this week said it will ship a further 250 call centre jobs to Manila, lifting staff in the Philippines to 700, while 1,600 jobs remain in New Zealand.

Rising unemployment is set to become one of the biggest issues for economies worldwide this year as Japan, the US and Europe move into synchronised recession.

US companies eliminated 522,000 jobs last month, according to a gauge from ADP Employer Services. The official non-farm payroll data is released on Friday in the US America eliminated 2.6 million jobs last year.

By Jonathan Underhill

Comments from our readers

No comments yet