- Michael Gordon, senior economist at Westpac
Although, employment change in New Zealand surprised to the downside, with the corresponding gauge coming in at 3.7% in the June quarter against expectations of 4%, the unemployment rate fell to the lowest level in five years in the second quarter. Statistics New Zealand said that jobless rate declined to a seasonally adjusted 5.6% compared to downwardly revised 5.9% in the March quarter. Buoyed by the growing economy, companies are hiring more people, with employment climbing 0.4% on quarter to more than 2.33 million people. Analysts expected a 0.7% quarterly change, though. An expanding construction sector continued to spur jobs growth, particularly in Canterbury, where the rebuild from the 2010 earthquake continues. The participation rate, however, fell 0.3 of a percentage point to 68.9%, below expectations, as the workforce remained static and the population grew. New Zealand employment confidence is at its highest since before the 2008 global financial crisis as the nation's economic growth spurs companies to employ more staff. Nevertheless, wage growth remains at a steady pace in line with subdued inflation.
The Kiwi remained under pressure in Wednesday Asian trade session amid lower dairy prices and weaker than expected job growth. The New Zealand Dollar traded 0.33% lower versus its U.S. namesake at 0.8434.
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