By Lucy Craymer
WELLINGTON, May 6 (Reuters) - New Zealand's jobless rate fell to 5.3% in the first quarter, while employment increased 0.2% from the previous quarter, according to data released by Statistics New Zealand on Wednesday.
Economists polled by Reuters had forecast an unemployment rate of 5.4% and for employment to rise 0.3%. The central bank had expected the unemployment rate to be 5.3%.
The participation rate was 70.4% in the first quarter, slightly lower than a forecast 70.5%.
Data showed
first-quarter seasonally adjusted private sector wages increased 2.0% from the previous year.
Statistics New Zealand noted that the seasonally adjusted NEET rate - or the proportion of youth aged 15 to 24 who are not in employment, education or training - had risen slightly.
Wage growth increased in the quarter with the private sector labour cost index (LCI) excluding overtime recording a 0.5% lift, compared with 0.4% increase in the prior quarter.
Economists expect the impact of the Middle East crisis to lag in the employment market with the true impact not being seen for six to 12 months.
In February, before the U.S.-Israel war on Iran started, New Zealand’s central bank forecast unemployment would track lower over the next two years. Those forecasts are set to be updated at the end of May and are expected to be downgraded due to the economic hit from the Iran war.
The central bank will be looking at wage inflation for any signs of entrenched price pressures. However, as the data is from the first quarter, it is also likely to have been only partly impacted by the war.
The central bank held its official cash rate at 2.25% in April, buying time to assess the fallout from the Middle East conflict. However, it signalled it would act decisively if inflation heats up.
(Reporting by Lucy Craymer; Editing by Chris Reese and Lincoln Feast)
