-Graeme Wheeler, RBNZ Governor
Graeme Wheeler, the Governor of the Reserve Bank of New Zealand, reiterated his stance on interest rates, saying that the official cash rate will be held unchanged for some time in light of the recent easing actions by other major central banks amid world's disinflation pressures. Future economic data will determine interest-rate adjustments, Wheeler said, underlying that policy easing may be justified should domestic demand weakened and price pressures cooled further. Majority of economists do not expect the RBNZ to alter borrowing costs until 2016 following Wheeler's move to neutral policy stance last week.
In the meantime, the unemployment rate in New Zealand unexpectedly soared to 5.7% in the final quarter of 2014 up from 5.4% in the preceding three-month period, despite a solid growth in jobs. According to Statistics New Zealand, employment rose 1.2% in the December quarter, surpassing forecast for a 0.8% growth. Nevertheless, the jobless rate climbed 0.3 percentage points in the reported period. That was in a large part due to an increase in the participation rate, which surged to a record high of 69.7% in the three months through December, up from 69.0%. On an annual basis, the jobless rate dropped in the December quarter, and job growth was 3.5%. The construction sector accounted for 32% of national employment growth over 2014, reflecting the ongoing Canterbury rebuild and solid housing demand.
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