7 May 2014
Demand for NZ labour remains solid - ANZ
FXStreet (Bali) - Mark Smith and Sharon Zöllner, Senior Economists at ANZ, provided their take on the New Zealand job numbers, which saw unemployment rate unchanged at 6%, while a rise of 0.9% or 22K in employment change.
Key Quotes
"Strengthening economic activity is continuing to flow through into the demand for labour, with solid increases evident in both the HLFS and QES employment measures."
"Lifting labour force participation (to the highest level on record) prevented a fall in the unemployment rate. Without this, the unemployment rate would have fallen to 5.6%, the lowest since March 2009."
"Hours worked measures were also strong, boding well for Q1 GDP. We expect a solid GDP outturn, underpinned by lifting services and goods sector activity."
"For now, the wage backdrop remains contained, with annual private sector LCI wage inflation at just 1.6%. This is not surprising, given the lags from activity to wage inflation, and still-low (but set to climb) rates of consumer price inflation."
"A strong backdrop for economic activity, with only modest growth in supply-side capacity, is expected to translate into lifting consumer prices and wages. We continue to expect a further 50bps of OCR hikes over the remainder of the year, and a moderate OCR tightening profile by historical standards."
"Critical for the evolution of the OCR over the coming years will be the trajectory for productivity growth and how supply-side capacity across the economy expands, keeping a lid on wage inflation. Subtle nuances from today’s release around the lift in labour force participation provide room for optimism."
Key Quotes
"Strengthening economic activity is continuing to flow through into the demand for labour, with solid increases evident in both the HLFS and QES employment measures."
"Lifting labour force participation (to the highest level on record) prevented a fall in the unemployment rate. Without this, the unemployment rate would have fallen to 5.6%, the lowest since March 2009."
"Hours worked measures were also strong, boding well for Q1 GDP. We expect a solid GDP outturn, underpinned by lifting services and goods sector activity."
"For now, the wage backdrop remains contained, with annual private sector LCI wage inflation at just 1.6%. This is not surprising, given the lags from activity to wage inflation, and still-low (but set to climb) rates of consumer price inflation."
"A strong backdrop for economic activity, with only modest growth in supply-side capacity, is expected to translate into lifting consumer prices and wages. We continue to expect a further 50bps of OCR hikes over the remainder of the year, and a moderate OCR tightening profile by historical standards."
"Critical for the evolution of the OCR over the coming years will be the trajectory for productivity growth and how supply-side capacity across the economy expands, keeping a lid on wage inflation. Subtle nuances from today’s release around the lift in labour force participation provide room for optimism."