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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%.”