New Zealand Dollar Falls as the Unemployment Rate Spikes
The New Zealand Dollar fell notably after the government reported that the Unemployment Rate rose to 6.8% in the fourth quarter, much higher than the 6.5% consensus estimate and the 6.4% in the third quarter. The New Zealand labor market has failed to recover from the global economic downturn, in sharp contrast to neighboring Australia where the employment landscape has steadily improved.
The latest spike in the unemployment rate was spurred by a 0.5% quarter-over-quarter decrease in employment, much worse than the 0.2% increase that was anticipated. Employment remains 1.3% higher than a year ago, but a 2% reading was expected. Finally, the Labor Force Participation Rate declined to 67.9% in the fourth quarter from 68.3%.
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