NZD: Robust NZ labour market – BNZ

By FXStreet Craig Ebert, Senior Economist at BNZ, suggests that the recent NZ’s March quarter labour market data were fundamentally robust.

Key Quotes

“Sure, there will be those who will jump on the jump in the unemployment rate. It lifted to 5.7%, from a revised 5.4% in Q4 2015 (initially 5.3%). But that would be to miss the broader point that employment has picked up to a very strong pace and participation in the labour market is soaring anew. There was even a strengthening in some key wage inflation measures. Hours worked, meanwhile, attested to good economic expansion in Q1 GDP.

The unemployment result we’d describe as middling rather than weak. Following its big drop from 6.0% in Q3 of last year to 5.4% in Q4 – the lowest since 2009 – it was always prone to a technical correction upwards in Q1 2016. And so it came to pass. We just failed to nail the extent of this technical move. We, like the market (and the RBNZ), expected a lift to 5.5%.

In an underlying sense, however, we’re talking about a relatively robust economy, which today’s range of labour market results attested to. It seems the markets have taken the data in similar style. …read more

Source:: FX Street