New Zealand Dollar Gains After Lowest Jobless Rate in 7 Years
- New Zealand Dollar gained after the country’s labor data beat estimates
- 4Q unemployment rate 5.3% vs 6.1% forecast and 6.0% in 3Q
- Stronger labor market may help stoke growth and CPI in New Zealand
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The NZD/USD exchange rate rallied after New Zealand’s labor statistics crossed the wires. The country’s fourth quarter unemployment rate surpassed expectations with a print of 5.3 percent, the lowest mark since March 2009. Economists estimated a 6.1 percent reading. However, the participation rate fell below its forecast of 68.9 percent and the revised prior of 68.7 percent to 68.4 percent for the quarter.
The quarterly and yearly job gains for the same period grew at a faster rate than forecasted. Employment change was 0.9 percent (QoQ) versus the 0.8 percent anticipation and the -0.5 percent revised prior. The year-on-year figure showed a print of 1.3 percent as opposed to the 1.1 percent estimate and the third quarter’s 1.5 percent.
Average hourly earnings came in at 0.2 percent (QoQ), lower than the 0.5 percent expectation and the previous 0.9 percent figure.
A strengthening labor market may help stoke growth and inflation in New Zealand which may make the RBNZ less likely to cut interest rates in the near-term. At the central bank’s January rate decision, it noted that further easing may be needed but that CPI and growth are expected to increase in 2016.
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