New Zealand's unemployment at 3.3 per cent

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Joblessness in New Zealand remains at rock bottom, with unemployment measured at 3.3 per cent in the June quarter.

On Wednesday, Stats NZ released its latest jobless numbers, confirming a slight uptick from 3.2 per cent for the March quarter but remaining at a historically low level.

"Measures of spare labour market capacity have fallen over the year and remained low for several quarters, continuing to show a tight labour market," Stats NZ spokeswoman Becky Collett said.

"Under-utilisation and unemployment rates have fallen over the year for Maori, Pacific, and Asian ethnic groups, as well as young people."

The slight uptick was contrary to market expectations of a fall to 3.1 per cent.

The unemployment figures are the product of government's response to COVID-19, which, like Australia, put in place expensive schemes to protect wages of workers affected by lockdowns and isolation periods.

Despite the result, the Kiwi economy is on the brink of recession, recording a 0.2 per cent GDP fall in the March quarter, with new figures to be released in September.

Stats NZ also released wage inflation figures on Wednesday, showing growth of 3.4 per cent in the year to June 2022.

This is the largest wage growth since late 2008, but well behind consumer price index (CPI) inflation, measured at 7.3 per cent last month.

The inflation spike is a major shock in New Zealand, where CPI growth has not risen above 2.5 per cent for the last decade.

Employment Minister Carmel Sepuloni said Wednesday's result was "very positive and shows our economic plan is working".

"New Zealand is well positioned to respond to a challenging global situation dominated by high inflation, the ongoing pandemic and related supply-chain disruptions," she said.

"Our economy has come through the pandemic better than nearly anywhere in the world, with growth up 5.1 per cent on a year ago and debt among the lowest in the OECD."

Opposition finance spokeswoman Nicola Willis focused on the disparity between wage inflation and CPI.

"This means prices have now risen faster than wages for the past eight quarters in a row, meaning Kiwis have gone backwards financially for two years, and counting," Ms Willis said.

The data caused at least two NZ banks to sharpen their expectations for the official cash rate, which has been raised by 50 basis points at the last three meetings of the Reserve Bank to sit at 2.5 per cent.

Westpac now believes it will head to four per cent, and Kiwibank chief economist Jarrod Kerr said the Reserve Bank may give updated advice at its next assessment in a fortnight.

"The RBNZ is likely to signal a move to four per cent and potentially higher," he said.

"The RBNZ is resolute in the need to tame the great inflation beast."

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