Thursday 3rd May 2012
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New Zealand's employment growth in the first three months of the year was all in part-time positions, which rose to a record and picked up the slack from a decline in the number of full-time jobs.
The number of part-time positions climbed 2.5 percent to 531,000 in the three months ended March 31, following a 3.2 percent gain in the December quarter, according to Statistics New Zealand. On an annual basis, part-time positions rose 5.4 percent
At the same time, full-time jobs fell 0.2 percent in the March quarter to 1.7 million, the lowest level since September 2010, for an annual decline of 0.3 percent.
The level of underemployment, which is part-time workers who would like to work more hours, rose by 2,500 to 107,600 people, or 4.5 percent of the labour force wanting more hours. Seasonally adjusted hours worked in the quarter rose 0.1 percent to 73.88 million in the quarter.
"This fall in hours worked has coincided with a decline in full-time employment and a corresponding increase in part-time employment," Jane Turner, economist at ASB, said in a note. "This suggests that activity may be underperforming businesses expectations, and has resulted in reducing staff hours."
The headline figure showed an increase in the unemployment rate to 6.7 percent in the March quarter from a revised 6.4 percent in the prior period, as the number of people looking for work swelled. The participation rate climbed to 68.8 percent from 68.2 percent, beating the 68.3 percent forecast by economists in a Reuters survey.
Felix Delbruck, senior economist at Westpac Banking, said the figures were "unambiguously soft" with the jobless rate well ahead of the Reserve Bank's 6.3 percent forecast.
"It adds to the suite of data that's been lower than what the Reserve Bank expected," Delbruck said. "We're not expecting them to hike rates before March 2013."
Traders have increased their bets that the central bank may yet cut the official cash rate from a record-low 2.5 percent, with 16 basis points of reductions priced in over the coming 12 months, according to the Overnight Index Swap curve.
The one-year swap rate dropped 10 basis points to 2.53 percent, the lowest since Nov. 28, and has shed 22 basis points in the past fortnight.
Westpac's Delbruck said the local jobs market is a "divided picture" with male-dominated industries, such as construction, set to benefit on the back of the Canterbury rebuild. At the same time, there's been a drop-off in female-dominated sectors, such as health and education and retail services.
Unemployment among women was 7.1 percent in the March quarter, the highest rate since December 2009. The last time it was higher was in December 1998. Male unemployment was 6.3 percent.
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