WELLINGTON, May 1 (Reuters) - New Zealand’s jobless rate increased in the first quarter, reducing capacity pressures in the labour market, while quarterly wage inflation slowed, according to official data released on Wednesday.
New Zealand's jobless rate rose to 4.3% in the first quarter, while employment unexpectedly fell 0.2% on the prior quarter, according to data released by Statistics New Zealand.
Economists polled by Reuters had forecast an unemployment rate of 4.2% and employment growth of 0.3%.
Statistics New Zealand labour market manager Deb Brunning said in a statement that while the employment rate has declined from recent highs over the past year-and-a-half it remained historically high.
Wage growth slowed in the quarter with the private sector labour cost index (LCI) excluding overtime recording a 0.8% lift on the quarter, compared with 1.0% increase in the prior quarter.
An easing in tight labour market conditions will be good news for the Reserve Bank of New Zealand (RBNZ).
In early April, the RBNZ kept its cash rate at 5.5% for the sixth successive meeting and reiterated that restrictive monetary policy is necessary to further reduce capacity pressure and bring down inflation.
The New Zealand dollar dipped 0.2% to $0.5878, while two-year swap rates fell 6 bps to 5.045%. Markets now sees a total of 34 basis points of easing from the RBNZ this year.
The participation rate was 71.5% in the first quarter, down from 71.9% in the fourth quarter.
(Reporting by Lucy Craymer Editing by Chris Reese and Sam Holmes)
