NZ: Q2 Unemployment rate fell to 3.9% – ANZ

ANZ analysts point out that New Zealand’s unemployment rate fell to 3.9% in the June quarter, lower than the market and RBNZ expected.

Key Quotes

“Employment was up a solid 0.8% q/q, with annual growth rising to 1.7% y/y from 1.5%.”

“Wages lifted 0.8% q/q, also more than expected by the market or RBNZ, resulting in a tick up in annual growth to 2.2% y/y. April minimum wage increases supported the quarterly rise; underlying wage inflation is rising only slowly.”

“This print suggests that the starting point for the labour market is robust. However, we are wary of reading too much into the release given the volatile and lagging nature of this data, particularly in the context of the slowing economy, weak employment intentions, and falling job ads.”

“The RBNZ will focus on the deteriorating economic outlook tomorrow. We expect rate cuts in August, September and November, taking the OCR to 0.75% by year-end.”