New Zealand’s labour market remained soft in Q2, reinforcing expectations that the Reserve Bank of New Zealand (RBNZ) will deliver a 25 basis point rate cut at its August policy meeting.
Earlier:
- New Zealand Q2 Unemployment rate 5.2% (vs. expected 5.3%)
- The unemployment rate rose slightly to 5.2%, up from 5.1% in Q1, while employment fell 0.1%.
- The labour force participation rate declined to 70.5%, its lowest level since early 2021.
- The jobless figure matched the RBNZ’s own projections and came in just below the 5.3% consensus forecast.
- While wage growth picked up modestly in Q2—private sector wages rose 0.6% quarter-on-quarter—overall signals point to a cooling labour market and increased likelihood of further monetary easing.
Market pricing shows a circa 88% chance of an August rate cut. The Reserve Bank of New Zealand meet in the 20th.
Via Reuters:
- ASB Bank’s Mark Smith noted that with inflation tracking within the central bank’s 1–3% target range, further easing would be appropriate to support both the labour market and broader economy.
- Meanwhile, ANZ’s Miles Workman warned the data highlights excess capacity in the economy, suggesting the RBNZ may start focusing more on downside inflation risks going forward.
NZD/USD rose a little after the data.
This article was written by Eamonn Sheridan at investinglive.com.