WELLINGTON, Feb 5 (Reuters) - New Zealand's jobless rate hit a four-year high while growth in labour costs cooled, supporting expectations the central bank will cut rates by a further 50 basis points later this month.

Data released by Statistics New Zealand on Wednesday saw the unemployment rate rise to 5.1% in the fourth quarter and reach its highest level since the third quarter of 2020. Furthermore, employment in the quarter fell 0.1%, its biggest drop since 2009.

Wage growth remained unchanged in the quarter, with the private sector labour cost index (LCI) excluding overtime recording a 0.6% lift on the previous quarter, in line with forecasts.

The data was largely in line with market expectations and there was little market reaction with the New Zealand dollar trading around $0.5648.

However, ASB economists said in a note the softening labour market prognosis should prompt continued frontloading of monetary policy easing.

"The RBNZ will be wary of the wider economic, social, and labour market costs from keeping overly restrictive official cash rate settings for longer than is necessary," they added.

The central bank has cut the cash rate by 125 basis points since August and said in November that a further 50 basis point hike was likely in February amid cooling inflation pressures and a slowing economy.

New Zealand's economy sank into a technical recession in the third quarter of 2024.

Westpac senior economist Michael Gordon added that some of the details in the employment data were marginally stronger than the central bank had assumed but none of this was likely to change its thinking.

"The RBNZ has already stated that the base case for its policy review later this month will be a 50 basis point official cash rate cut, unless there was conclusive evidence otherwise," Gordon said. (Reporting by Lucy Craymer Editing by Sam Holmes and Alasdair Pal)