NZ Unemployment Jumps Sharply
Thursday May 12, 2:50 am ET
New Zealand Unemployment Rate Jumps Sharply in Sign of Economic Slowdown
WELLINGTON, New Zealand (AP) -- New Zealand's unemployment rate jumped sharply in the first quarter of 2005 in an indication that the economy is slowing as analysts had predicted, data released Thursday showed.
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The unemployment rate rose to 3.9 percent in the three months ended March 31, from 3.6 percent in the fourth quarter of last year, Statistics New Zealand reported.
It was the first rise in the nation's unemployment rate since December 2003. The number of people working in this nation of 4 million remains a record 2.06 million, the government-funded statistics agency said.
However, the official unemployment figure can still rise when more people register that they are looking for work.
The worse-than-expected data shows the economy has started its long-awaited downturn, which may make the Reserve Bank less inclined to hike interest rates at its next review on June 9, observers said.
The central bank has hiked its benchmark interest rate by 1.75 percentage points to 6.75 percent since January last year in efforts to contain inflation.
In its last review of monetary policy in April, the Reserve Bank highlighted "ongoing labor market tightness" as putting upward pressure on inflation.
The bank said it will be assessing labor market data "to confirm whether further policy tightening is warranted at the June Monetary Policy Statement."
In March, the bank forecast first quarter unemployment at 3.5 percent. Economists had been expecting a rate of 3.6 percent.
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