New Zealand’s unemployment rate rose to 5.6% in Q2, exceeding forecasts and signaling labor market weakness.
The New Zealand Dollar fell 0.54% to 0.5860 against the USD after data showed unemployment surged to 5.6% in the second quarter, the highest since 2015. The print surpassed the 5.4% consensus and prior 5.3% reading, underscoring labor market deterioration.
Employment growth slowed to 0.5% from 0.2% in Q1, while the participation rate edged up to 70.7%. The sharper-than-expected rise in unemployment reduces pressure on the RBNZ to tighten policy further, shifting market expectations toward a more cautious stance.
Traders are now focusing on upcoming US economic releases, including ADP employment and ISM Services PMI, ahead of Friday’s nonfarm payrolls report.