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ANZ analysts are expecting to see a stable unemployment rate of New Zealand at 4.3% in Q1.

Key Quotes

“Labour market data has been volatile in recent quarters; last quarter we saw a rise, but the general trend has been a gradual tightening. But further improvement in the near term seems unlikely with GDP growth subdued.”

“Wage inflation is expected to have firmed to 2.1% y/y, reflecting both previous tightening in the labour market and minimum wage increases.”

“A stable or slightly lower unemployment rate should set the scene for the RBNZ to deliver a downward-sloping OCR track at the May MPS, in line with our expectation for an August rate cut. A higher unemployment rate and subdued wage inflation would add to the risk of a rate cut as soon as May.”