New Zealand reported a 0.4% quarter-on-quarter increase in employment for the second quarter of 2024, confounding expectations for a 0.2% decline. The country’s unemployment rate also came in better than expected at 4.6%, slightly below the consensus of 4.7%.
Wage growth also beat estimates, with the labor cost index showing a quarterly increase of 0.9% versus an expected 0.8% gain. Labor force participation also improved by two percentage points to 71.7%.
However, the previous quarter’s figures saw some downward revisions, with the employment change being cut from a 0.2% decline to a 0.3% decline, while the unemployment rate was revised from 4.3% to 4.4%.
Link to New Zealand labour market statistics for Q2 2024
New Zealand Dollar vs Major Currencies: 5 minutes
Comparison of the New Zealand Dollar with major currencies Chart by TradingView
The New Zealand dollar, which had been trading mostly sideways ahead of the jobs report, reacted sharply to the stronger-than-expected results.
Even after a slight dip an hour after the actual release, the New Zealand dollar managed to hold its ground and extend its upward march as more traders in the Asian session got information about the upbeat jobs numbers, which are likely to temper expectations of a dovish shift by the Reserve Bank of New Zealand in its upcoming policy decision.
The New Zealand dollar made its biggest gains against the Japanese yen, which was also driven by the carry trade unwind, followed by the Swiss franc and the US dollar as risk appetite improved early Tuesday.
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