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The New Zealand economy unexpected lost 0.2% jobs quarter-on-quarter in Q1 2024, bringing the unemployment rate up from 4.0% to 4.3% during the period.

Underlying components revealed that the labor force participation rate dipped from 71.9% to 71.5% to suggest that folks may be losing confidence in the jobs market. Meanwhile, the labor cost index dipped from a 1.0% quarterly gain in Q4 2023 to a 0.8% increase in the first quarter of this year.

  • Employment change for Q1 2024: -0.2% q/q (+0.3% expected, 0.4% previous)
  • Unemployment rate for Q1 2024: 4.3% (4.3% expected, 4.0% previous)
  • Labor force participation rate for Q1 2024: 71.5% (71.9% previous)
  • Labor cost index for Q1 2024: 0.8% q/q (1.0% previous)

Link to New Zealand’s quarterly employment change

Market Reactions

New Zealand dollar vs. Major Currencies: 5-min

New Zealand Economy Shed Jobs in Q1, Unemployment Rate Rose to 4.3%

Overlay of JPY vs. Major Currencies Chart by TradingView

The Kiwi was cruising somewhat lower, except against the Aussie, a few hours prior to the actual jobs release since risk-off flows were in play during the previous session.

Weaker than expected headline employment change data spurred a drop for the commodity currency, even as the unemployment rate came in line with expectations of an increase from 4.0% to 4.3% for the quarter.

Downbeat underlying data, particularly when it came to wage inflation, likely highlighted how cost pressures are being weighed down by high interest rates.

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