ANZ comments on the New Zealand employment report for Q3 (data is here, from earlier)
Briefly:
- Labour demand weakened sharply in Q3
- Employment contracting for the first time in three years
However, this summary arguably overstates the weakness to some degree, with compositional aspects and other demand indicators generally not as weak
- With unemployment rate continuing to grind higher
- & wage growth benign
- ... it is certainly a backdrop consistent with a need for more monetary policy easing
Today's figures arguably increase the odds of that easing being delivered as soon as December, but we are not entirely convinced of that yet, with the NZD, dairy prices and the global backdrop arguably set to hold sway. Labour market data typically lags the rest of the economy, and more timely growth indicators are now picking up.
