NZ Q3 unemployment rate 4.6% (exp 4.7%)

New Zealand July — September jobs report — The two ‘headline’ results from the report are the unemployment rate and employment change

Unemployment rate: 4.6% … BEAT

  • expected 4.7%, prior was 4.8%

Employment change q/q: 2.2% … huge beat

  • expected 0.8%, prior was -0.2%

Employment change y/y:  4.2% … huge beat

  • expected 2.5%, prior was 3.1%

NZD jumping on the great results

But wait, there is more …

Participation rate: 71.1% … unemployment rate drop and a big surge in this — nice!

  • expected 70.2%, prior was 70.0%

Average hourly earnings: +1.2% … beat

  • expected 1.1%, prior was 0.8%

Private wages including overtime: 0.7% … beat

  • expected 0.6%, prior was 0.4%

Private wages excluding overtime: +0.7%% … in line

  • expected 0.7%, prior was 0.4%

Quick take:

  • While two of the wage measures have beaten, wage growth is still slow.
  • Note that u/e is now at an 8 year low
  • Underutilisation rate unchanged q/q, and down y/y (11.8%, down from 12.3 percent a year ago) … an improvement but work to be done here
  • highest labour force participation rate on record
  • Labour cost index (LCI) +1.9% y/y (from +1.7% y/y in the previous report — for Q2), this is the largest y/y increase since the September 2012 quarter

—ps. while eco data is important, much of the recent movement in the NZD has been driven by politics — the change of government. NZD jumping on this report though!-Note also the new government is going to add an employment mandate to the RBNZ Act … but on the basis of recent jobs growth in NZ this would seem not necessary. What could possibly go wrong?

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