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Australia and New Zealand Bank’s analysis team is expecting that the New Zealand’s unemployment rate rose to 4.4% in Q2, as weakness in the economy filtered through to the labour market.

Key Quotes

“Survey indicators and job ads suggest employment growth was weak in Q2, consistent with subdued GDP growth.”

“Wage inflation is expected to remain flat at 2.0% y/y, with a quarterly increase supported by minimum wage increases and previous tightening in the labour market.”

“The higher unemployment rate should set the scene for the RBNZ to cut the OCR at the August MPS the following day, and signal that an even lower OCR is likely needed.”