New Zealand’s official unemployment dropped to 4.9 per cent in the December quarter – from 5.3 per cent.
Economists had expected a rise to around 5.6 per cent.
However they had warned that markets would be watching for a better than expected result which would put more upward pressure on interest rates.
The Kiwi dollar rallied to US71.88c after the news.
Last quarter’s unemployment rate of 5.3 per cent followed the largest increase observed in a single quarter since the series began in 1986.
Economists have also warned that data could be noisy due to conflicting impacts of Covid-19 such as closed borders restricting immigration.
But news that it has fallen back towards pre-Covid levels will still be viewed as a shock.
Prior to the pandemic the unemployment rate was 4.6 per cent.
The Household Labour Force Survey has provided the official unemployment figure since 1986, polls 15,000 households (about 30,000 people) across 13 weeks to generate an average for the quarter – rather than a set point in time.
To be categorised as unemployed by Stats NZ, a person must:
• Not have a job.
• Be available to start work.
• Have been actively seeking work in the past four weeks or be due to start a new job in the next four weeks.