NZ Labour Market Grapples with Stagnant Wage Growth

New Zealand's labour market data for the June quarter shows a mixed bag. The unemployment rate of 5.6% is higher than expected and above our forecasted 5.3%. The number of workers entering the workforce exceeded job growth, leading to the increase in unemployment.

Underutilization rates spiked to 13.8%, the highest level in 12 years. This implies that Kiwi workers are struggling to get enough work or earning sufficient wages. The decline in total hours worked across the economy further supports this claim.

The rising inflation rate of 4.1% and stagnant wage growth at 2% indicate that Kiwi households continue to be worse off in real terms.

However, there were some positive signs, including a rise in employment and participation rates. But overall, the data paints a grim picture of New Zealand's labour market.