NZ Unemployment Rate Expected to Hit 11-Year High in June Quarter
New Zealand's unemployment rate is expected to hit an 11-year high in the June quarter, according to Statistics NZ data due out on August 5. The Reserve Bank (RBNZ) projects a 5.4% jobless rate, but economists at ANZ and ASB anticipate it will rise even higher, to 5.5%. This would mark the highest unemployment level since the June 2015 quarter.
The labour market data is expected to paint a 'soft picture' of the economy, with firms having 'pressed the pause button' due to spiraling oil prices and heightened global uncertainty. ANZ economist Miles Workman said this suggests that the labour market will not become a renewed source of accelerating CPI inflation pressures anytime soon.
BNZ economists expect a 2% annual growth in the private sector Labour Cost Index (LCI), which measures changes in salary and wage rates. Westpac also expects LCI to rise, but only by 0.6%, as it believes the existing degree of slack in the labour market is crucial in preventing wage growth.
Other economists have similar forecasts for the unemployment rate, with ANZ predicting a 0.1ppt rise to 5.4% and ASB expecting a 'relatively soft picture' of the labour market due to ongoing uncertainty in the Middle East.