Talking Points:
- The New Zealand Dollar was battered by expectation-missing jobless figures
- The headline rate topped 5%
- There were some bright spots, but they weren’t enough
The New Zealand Dollar slid Wednesday after the release of some official employment figures which were feeble overall, even if there were some areas of strength.
The jobless rate for the fourth quarter was 5.2%. This missed expectations by a wide margin as the market had been looking for a 4.8% print. It was also substantially above the third quarter’s 4.9% and back above the psychologically troubling 5% level. The ‘employment-change’ measure also missed expectations year-on-year. For the third quarter, it was +5.8%, when the markets had hoped for a 6.1% rise to match the third quarter’s progress.
Admittedly the data weren’t all bad. Compared to the third quarter, employment-change rose 0.8%, just managing to top the markets’ 0.7% expectation. And the participation rate hit an all-time high of 70.2%, even if that was only a small improvement from the previous quarter’s 70.1%.
Wages and other earnings numbers managed to miss expectations however, suggesting that the labor market is not especially tight despite the high participation rate.
For its part the foreign exchange market decided to accentuate the plentiful negatives in the report. NZD/USD slithered down to 0.72893 from 0.73260 in short order after its release. This is hardly surprising as the numbers suggest that NZ’s record-low 1.75% base interest rate won’t be rising soon, given both the rising headline jobless rate and the clear lack of wage pressure on inflation.
Too many negatives; NZD/USD
Chart compiled using TradingView
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
