New Zealand jobless rate likely to see further modest rise in 2019 - Westpac
Source: FxWire Pro - Commentary / 20 Aug 2018 17:36:19 America/New_York
The jobless rate of New Zealand had risen to 4.5 percent in the second quarter, up from 4.4 percent in March. That is not a considerable change given the historic volatility of the jobless rate, and the reasons behind it were not alarming: employment rose 0.5 percent, but was outstripped by a rise in labor force participation.
“Looking ahead, we do expect to see a further modest rise in the unemployment rate to 4.7 percent next year, in a lagged response to the slowdown in GDP growth that has already taken place. However, this rise is expected to be short-lived with the unemployment rate to head lower again after GDP growth picks up”, said Westpac in a research report.
Wage inflation rose 1.9 percent in the year to June, and is expected to rise to about 2.3 percent p.a. over the next few years. Although the jobless rate is likely to rise modestly in the short term, it is still comparatively low, and a strengthening in GDP growth is on the cards.
“Wage growth will also be boosted by increases in the minimum wage and collective bargaining agreements, especially in some public sector roles”, added Westpac.
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