Insights 
VT 
New Zealand’s unemployment rate for January to March is 5.1%, against an expected 5.3%. The previous period also recorded a 5.1% rate.
Employment change increased by 0.1% quarter-on-quarter, aligning with expectations. Year-on-year, employment fell by 0.7%, with an anticipated decrease of 0.5%, following a prior fall of 1.1%.
Participation Rate And Wages
The participation rate stands at 70.8%, slightly less than the expected 71.0%, compared to a previous 71.0%. Private wages excluding overtime rose by 0.4% quarter-on-quarter, less than the anticipated 0.5%, and down from 0.6% previously.
Private wages, including overtime, also increased by 0.4% quarter-on-quarter. This is below the expected 0.5% rise and down from the previous 0.6%.
Average hourly earnings grew by 0.2% quarter-on-quarter, following a prior increase of 1.3%. The Reserve Bank of New Zealand indicates increased risks to the financial system over the last six months.
Global Economic Impact
Meanwhile, global news includes anticipated discussions between the US and China on economic matters, impacting currency movements like the Australian dollar. China confirms plans for trade talks involving Vice Premier He Lifeng and senior US representatives.
The data show that while unemployment in New Zealand remains unchanged from the previous quarter at 5.1%, it has nonetheless come in below forecasts. Expectations pointed to a slight softening in the labour market, so the result offers a mild surprise—though not enough to prompt any directional rethink on its own. We can interpret this as a signal that hiring, though not expanding rapidly, is holding up better than initially feared.
Where we begin to see more concrete shifts is in the details beneath the headline. The employment change registering a 0.1% uptick from the prior quarter confirms that the jobs market isn’t contracting at present—yet when taken with the 0.7% fall in employment compared to the same period a year earlier, it highlights slowing momentum. In short, new hiring has largely stalled, while total employment numbers are quietly slipping on an annual basis.
What makes this even more relevant is how this movement interacts with participation. With the rate edging down from 71.0% to 70.8%, it’s evident that fewer people are either working or seeking work. This points to early-stage discouragement: individuals who might otherwise enter or stay in the job market appear to be stepping aside. It’s often these details that lead institutional observers to adjust their models.
Wage data add another layer of caution. Private-sector wages, with and without overtime, have both posted slower growth than economists had pencilled in. The same goes for average hourly earnings, which have come in far below the previous quarter’s rate. Wage pressures, which tend to drive decisions on rates via their connection to inflation, appear to have cooled considerably. If you viewed the previous trend as unsustainable, then this moderation may come as a necessary constraint rather than a setback.
These wage readings, especially the quarter-on-quarter slowdown in hourly earnings from 1.3% to just 0.2%, reinforce how squeezed businesses remain. They’re opting to limit pay growth, perhaps to preserve jobs or balance tightening margins. The effect on household income feeds directly through to expected spending patterns ahead, which is material for those of us watching interest rate expectations.
Added to this is the Reserve Bank of New Zealand’s phrasing around increased risks to the financial system. It implies discomfort with current financial conditions or exposures, and while not a direct contributor to monetary policy shifts, it urges caution. Those overseeing risk will be revisiting allocation models systematically. Dislocated triggers and unbalanced hedges tend to surface when systems strain over multiple quarters—not all at once.
Outside New Zealand, attention continues to float toward global policy meetings, particularly discussions between the United States and China. When even preliminary talks resume at this level—involving Vice Premier He and senior American officials—it tends to influence cross-border pricing, such as in FX pairs like AUD/USD. That, in turn, has spillover effects for nearby economies—either through demand transmission or capital flow considerations.
The shifting wage figures, coupled with softening participation and heightened warnings from the central bank, mean this is a data set that lowers rather than raises growth projections. For those of us aligned with forward-looking expectations, market adjustments should not come all at once. It’s the sequence—how wages, employment and participation inform rate views over time—that matters most now. It’s there we find the clearer signals.
