(Bloomberg) -- New Zealand employment fell less than forecast in the second quarter and the jobless rate unexpectedly declined even as the economy slumped.

• Employment fell 0.4% from the first quarter; economists expected a 2% contraction
• The jobless rate dropped to 4% from 4.2%, Statistics New Zealand said Wednesday in Wellington; economists expected a rise to 5.6%
• The participation rate fell to 69.7% from a revised 70.5% in the first quarter

Key Insights

• The government’s wage subsidy and the shorter-than-expected time spent in lockdown delayed the labor market’s response to the recession
• The subsidy ends on Sept. 1, which will make job creation a central theme of the Sept. 19 general election
• Statistics New Zealand decided that people who may have wanted a job but were not actively seeking work during the lockdown were outside the labor force rather than unemployed, which pushed the participation rate and the jobless rate lower

Market Reaction

• The kiwi dollar rose after the report. It bought 66.39 U.S. cents at 10:51 a.m. in Wellington from 66.22 cents immediately before the release.

Other Details

• From a year earlier, employment rose 1.2%
• The Labour Cost Index for non-government workers rose 0.2% in the quarter, the slowest pace of increase since 1994

Get More

• New Zealand Jobless Surge Seen Delayed Until After Election

(Updates with wage increase)

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