New Zealand: Unemployment rate to rise to 4.2% in the September quarter - Westpac

Michael Gordon, Analyst at Westpac, offers a brief preview on New Zealand’s jobs report due to be released next week.

Key Quotes:

“We expect the unemployment rate to rise to 4.2% in the September quarter, reversing its surprising drop to an 11-year low in June.

Indicators of employment growth have softened over the last year as economic growth has slowed.

However, unemployment has remained surprisingly low to date. Older workers exiting the workforce may be a factor.

Wage growth is expected to continue its gradual acceleration.

We expect the Reserve Bank to keep the OCR on hold at its 13 November review. The RBNZ is already braced for a rise in unemployment in the near term, so it would take a worse outcome than what we are forecasting to prompt a change to the OCR outlook.”