Unemployment rate drops slightly to 5.3 percent in first quarter of year

• Unemployment eases to 5.3pct from 10-year high of 5.4pct
• 4000 jobs added in quarter, but number opting out grows
• Underutilisation rate steady at 12.9 pct; Youth unemployment rises
• Auckland, Bay of Plenty, Wellington highest unemployment rates
• Annual wage growth remains five-year low of 2pct
• Data a touch better than expected, Middle East conflict expected to dampen labour market

Unemployment has eased from a decade-high through a mix of more jobs being added and a rise in the number of people not chasing work, with the Middle East conflict yet to have any significant impact.

Stats NZ numbers showed the unemployment rate easing to 5.3 percent in the three months ended March, from 5.4 percent in the previous quarter.

A total of 163,000 people were unemployed, a fall of 2000 on the previous quarter but 7000 higher than a year ago.

The data was a shade better than most forecasts, and close to the Reserve Bank's forecasts from February.

Unemployment has been steadily rising as businesses either sacked staff or stopped hiring because of the weak economy, while the workforce has increased despite a slowdown in migration.

The level of underutilisation, including the unemployed and under-employed, used as a measure of slack in the jobs market, held at 12.9 percent, the highest rate since late 2020.

The number employed increased by about 4000 in the quarter, however, the economy still had more than 12,000 fewer jobs than a year ago.

Youth unemployment up

The number of people between 15 and 24 years who were unemployed, not in education or training, increased to 14.4 percent from 13.3 percent.

Stats NZ said there was a noticeable increase in the number of young women without work and not in training or education, with one-in-five aged between 20 and 24 in that category.

The regions with the highest unemployment were Auckland, Wellington and Bay of Plenty with rates between 6 and 7 percent, with most South Island regions below 5 percent.

The broad measure of wages showed overall growth remaining at a five year low of 2 percent, compared with a 3.1 percent rise in consumer prices.

The data, was collected largely before the Middle East conflict, and was broadly in line with Reserve Bank forecasts with economists mostly expecting the central bank to hold the official cash rate at 2.25 percent later this month.

Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.