New Zealand employment fell 0.1% in the third quarter versus forecasts for a 0.4% rise, reversing from 0.5% growth in the second quarter. The unemployment rate climbed to 5.7%, above the 5.5% consensus. In the market, NZD/USD traded at its session low just below 0.5600 and has retraced almost all of its advance from the 14 October trough a touch above 0.5550.
Labour Market and Wage Pressures
Wage pressures also cooled: the Labour Cost Index rose 0.4% on the quarter against a 0.5% forecast, down from 0.7% previously. The participation rate slipped to 70.4% from 70.7%, meaning the jobless rate increased despite fewer people seeking work.
Monetary Policy Impacts
Policy expectations have shifted after the Reserve Bank of New Zealand held rates on 28 October, when a hike had been anticipated; softer employment and easing wage growth weaken the case for tightening.
