NZ: Stronger Q1 employment report - TDS

Analysts at TDS note that the NZ’s Q1 employment report was much stronger than consensus expected as the +1.2%/qtr lift in jobs (shared between full-time and part-time) overwhelmed a fresh high in the participation rate (70.6%) and hence the unemployment rate eased back from 5.2% to 4.9%.

Key Quotes

“The RBNZ is presiding over a strong economy and tight labour market, but will note that wages growth remained stagnant, and at 1.6%/yr is behind inflation at 2.2%/yr.”

“The NZD popped to $US0.697 but momentum is likely to fade as the RBNZ has no incentive to turn hawkish, nor has it ammunition to alter its cash rate profile in next week’s Monetary Policy Statement (MPS).”