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FIRST TAKE: New Zealand's wage growth weak
FIRST TAKE: New Zealand's wage growth weak; risks skewed to higher 2Q unemployment rate
Private sector
wage growth slowed to just 0.3%q/q in 2Q, below all market
economists' forecasts. The consensus was looking for a
0.5%q/q rise. The 2Q result marked the slowest quarterly
wage growth since early 2000.
• From a year ago, wage inflation eased to the slowest pace in eight years. Wages grew 2.6%oya in 2Q.
• Until now, the weakness in the Kiwi labour market has not been as severe as expected given the economy has been in recession since the start of 2008. The second quarter labour market indicators may signal a change - Thursday's employment data will be key.
• There is now upside risk to our unemployment rate forecast. Our forecast is for the unemployment rate (Thursday) to print at 5.5% in 2Q, up from 5.0% in 1Q, marking the sixth straight quarterly rise. Following today's much weaker wage data, a higher jobless rate carries significant risk.
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