TD Securities forecasts another 25bps hike as New Zealand’s unemployment hits an 11-year high but wage growth exceeds expectations.
New Zealand’s unemployment rate rose to 5.6% in Q2, the highest in 11 years, driven partly by higher participation. Employment still grew 0.5% quarter-on-quarter, surpassing consensus estimates of 0.1%.
Private-sector wages increased 0.7% in Q2, slightly above the 0.6% consensus and the Reserve Bank of New Zealand’s May forecast. Despite mixed labor market signals, analysts see room for further tightening as economic activity recovers in Q3.
TD Securities expects the RBNZ to deliver another 25bps rate hike in September, citing persistent wage pressures and improving economic conditions.