Unemployment fell more than expected to 3.9 percent, but mostly because more people gave up looking for work. Jobs growth only matched the growth in the labour force from migration, Marc Daalder reports.

The unemployment rate fell to its lowest figure in more than a decade last quarter, Stats NZ announced this morning. The decrease was largely due to people leaving the labour force.

The jobless figure hasn’t been this low – 3.9 percent, down from 4.2 percent last quarter – since it hit 3.8 percent in June 2008. Economists had forecast the number would rise to around 4.4 percent.

There were 22,000 jobs added to the economy last quarter and the working age population saw a 21,000-person increase. The drop 6,000 drop in unemployment largely comes from 6,000 people leaving the workforce.

Wage growth also rose around the country by an anticipated 0.7 percent. Stats NZ said about a third of that rise was attributable to the minimum wage increase that went into effect in April. This was the largest bump in wage growth since December 2008. In particular, hospitality and food service jobs saw a 2.2 percent jump for the quarter.

The benefits of the good numbers were not spread evenly around the country. The unemployment rate dropped most significantly in Manawatu-Whanganui, the north end of the South Island, Wellington, and the Bay of Plenty. Auckland saw no drop in unemployment even though it added 2,800 jobs, as 8,800 Aucklanders left the workforce.

In Northland, the jobless rate jumped 0.4 percent.

Marc Daalder is a senior political reporter based in Wellington who covers climate change, health, energy and violent extremism. Twitter/Bluesky: @marcdaalder

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