Surprise as unemployed rate at 3.3%

Official unemployment edged up to 3.3% in the three months to the end of June, confounding the expectations of most economists who had expected unemployment to drop to a new low.

Unemployment had previously been sitting at 3.2% in both the March and December quarters, which was its lowest level since comparable records began in 1986 and probably the lowest unemployment has been since at least the 1970s.

Infometrics principal economist Brad Olsen said the latest labour market figures were choppy, and analysts appeared to draw different conclusions over whether they made further large increases in interest rates more or less likely.

Stats NZ reported the labour ‘‘underutilisation’’ rate, which is a broader measure of underemployment, reflecting the proportion of people wanting to work more hours, moved in the opposite direction to the official unemployment rate. It slipped to 9.2% in the three months to the end of June, from 9.3% in the March quarter.

The total number of hours worked in the June quarter also pointed to a tighter labour market, rising by 0.5% to just under 108 million hours.

Stats NZ described the unemployment and underutilisation rates as being ‘‘relatively unchanged’’ from the previous quarter.

‘‘Measures of spare labour market capacity have fallen over the year and remained low for several quarters, continuing to show a tight labour market,’’ senior manager Becky Collett said.

Salaries and wages, including overtime, as measured by Stats NZ’s labour cost index, rose 3.4% over the year, up from an annual rise of 3% in the year to the end of March but still well below the annual inflation rate of 7.3%.

That measure is designed to adjust for the type and quality of the work people are doing, to reflect employers’ true labour costs.

So, for example, if people were paid more because they took a promotion, that would not be recorded as a cost rise in the index.

Stats NZ said average ordinary-time hourly earnings, as measured by its quarterly employment survey, which is a rawer measure of pay, rose at the annual rate of 6.4% in the June quarter.

The Reserve Bank forecast in May that the June quarter unemployment figure would come in at 3.1%. But ANZ, the country’s largest bank, had been tipping it would slide to 2.8%.

ANZ and ASB had both tipped that if the unemployment rate had come in much lower than they had forecast that could have put a 75 basis point rise in the official cash rate on the table when the Reserve Bank releases its next monetary policy statement on August 17.