TD Securities reviews New Zealand’s Q2 labour report, noting unemployment rose to 5.6%, an 11‑year high, partly on higher participation, while employment still grew 0.5% quarter‑on‑quarter. Private-sector wages slightly beat consensus and the RBNZ’s May forecast. Despite mixed signals, they believe the RBNZ has room for another 25 bps rate hike in September as activity recovers.
Mixed labour data but more tightening likely
"The unemployment rate climbed to 5.6% in Q2, an 11-year high, from an upwardly revised 5.4% in Q1."
"The jump in the unemployment rate was partly due to a surprise rise in the participation rate despite employment growth climbing 0.5% q/q in Q2, above the consensus estimate at 0.1%."
"Private-sector wages grew 0.7% q/q in Q2, slightly stronger than the consensus (0.6%) and the RBNZ’s May forecast."
"Despite the mixed report today, we believe the RBNZ has the room to hike again by 25bps in September given that economic activity continues to recover in Q3."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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