Monday, 20 September, 2021
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N Zealand’s strong jobs data heightens rate hike bets

N Zealand’s strong jobs data heightens rate hike bets

WELLINGTON: New Zealand’s jobless rate fell sharply in the second quarter, beating expectations and sending the kiwi dollar higher as markets saw the upbeat data as a further sign that monetary policy will be tightened this month.

Data released by Statistics New Zealand on Wednesday showed the jobless rate fell to 4.0 per cent in the quarter ending June from a revised 4.6 per cent in the previous quarter, when analysts had expected it to hold at 4.5 per cent, report agencies.

The jobless rate is the lowest since December 2019 and back at pre-Covid levels after the pandemic lockdowns saw the unemployment rate surge to 5.3 per cent last year.

The New Zealand dollar rose 0.4 per cent on the upbeat news to reach US$0.7041.

The seasonally adjusted number of employed rose 1.0 per cent in the first quarter, again topping forecasts of a 0.7 per cent increase.

The participation rate rose to 70.5 per cent and the underutilisation rate fell to 10.5 per cent.

Wage growth accelerated in the June quarter with private sector labour cost index (LCI) recording a 0.9 per cent lift, higher than a forecast 0.6 per cent increase.