Michael Gordon, senior economist at Westpac, suggests that the New Zealand’s labour market surveys for the March quarter were a distinctly mixed bag, with a fall in the unemployment rate but weak jobs growth and subdued wages.
Key Quotes
“The unemployment rate fell slightly to 4.2%, beating market expectations of a flat outcome and our forecast of a slight rise. However, the survey also recorded a 0.2% drop in employment, paired with a sharp fall in the participation rate.”
“A closer look suggests that this may overstate the degree of weakness in employment. Full-time jobs saw a solid 0.8% rise, while part-time jobs plunged by 3.3%. Combined with the fall in participation, which appears to be concentrated in the older age groups, this suggests an unusually high early retirement rate in this quarter’s survey.”
“Wage pressures were softer than we expected, with the Labour Cost Index (LCI) rising by just 0.3% for the private sector. The annual rate of growth was unchanged at 2.0%.”
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