New Zealand unemployment rate jumps to 5.6% vs. 5.4% expected and 5.3% prior
The jobless rate climbing to an 11-year high alongside a bigger than expected rise in the participation rate points to a labour market where more people are looking for work than the economy is currently absorbing, a combination that typically weighs on sentiment even when other metrics surprise to the upside. The employment change figure, which came in well above forecast at 0.5% quarter on quarter, complicates the picture somewhat, suggesting hiring itself has not slowed as sharply as the headline unemployment rate implies. Wage growth also outpaced expectations on both a quarterly and annual basis, which could temper expectations for near-term policy easing even as the unemployment print points toward labour market slack. New Zealand assets are likely to react primarily to the unemployment headline given its 11-year high status, with the wage and employment beats providing some offsetting context.
--- New Zealand's unemployment rate rose to an 11-year high of 5.6% in the second quarter, above the 5.4% expected and up from 5.3% prior. Employment grew 0.5% on quarter, well ahead of forecasts, while wage growth also topped expectations.
Summary:
- New Zealand unemployment rate 5.6% vs. 5.4% expected and 5.3% prior, the highest level in 11 years
- Employment change QoQ (Q2) 0.5% vs. 0.1% expected and 0.2% prior
- Participation rate (Q2) 70.7% vs. 70.4% prior
- Labour Costs Index YoY (Q2) 2.1% vs. 2.0% prior
- Labour Costs Index QoQ (Q2) 0.7% vs. 0.6% expected and 0.5% prior
New Zealand's unemployment rate rose to 5.6% in the second quarter, its highest level in 11 years, coming in above the 5.4% expected by economists and up from 5.3% in the prior quarter. The data adds to signs of a cooling labour market even as several other components of the release came in stronger than forecast.
Employment change for the quarter rose 0.5% quarter on quarter, well ahead of the 0.1% economists had pencilled in and up from 0.2% growth in the previous quarter. The participation rate also climbed to 70.7%, above the 70.4% recorded previously, meaning more people entered the workforce even as the unemployment rate rose, a dynamic that can occur when jobs growth fails to keep pace with a larger pool of job seekers.
Wage growth also surprised to the upside. The Labour Costs Index rose 2.1% year on year, up from 2.0% previously, while the quarterly reading came in at 0.7%, ahead of the 0.6% expected and up from 0.5% in the prior quarter. The combination of firmer wage growth alongside a rising jobless rate presents a somewhat mixed signal for policymakers, with cost pressures in the labour market persisting even as slack appears to be building.
The rise in the unemployment rate to an 11-year high is likely to draw the most attention given its scale relative to expectations and its historical significance, but the accompanying strength in employment growth and wages suggests the underlying picture is less one-directional than the headline figure alone would suggest. The data will likely factor into the Reserve Bank of New Zealand's ongoing assessment of the balance between labour market slack and persistent wage pressures as it weighs the path for monetary policy in the months ahead.
The RBNZ next meet September 2.
This article was written by Eamonn Sheridan at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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