New Zealand employers hired at the slowest pace in more than two years in the second quarter, pushing the jobless rate higher.
Employment rose 0.3 percent, or by 7,000 jobs, in the three months through June after a revised 0.6 percent gain in the previous quarter, Statistics New Zealand said in a report Wednesday in Wellington. The median forecast in a Bloomberg News survey of 12 economists was for a 0.5 percent gain. The jobless rate rose to 5.9 percent and labor force participation fell to
Slower jobs growth comes as plunging dairy prices and weaker economic growth damp business confidence and investment, adding to signs that wages will remain subdued. Reserve Bank Governor Graeme Wheeler cut the official cash rate in June and July and last week said further easing is likely to be required to return price inflation to his 2 percent target.
“These data reinforce our expectation that the RBNZ cuts the OCR at least two more times,” Chris Tennent-Brown, senior economist at ASB Bank Ltd., said in a research note.
The kiwi dollar fell after the release. It bought 65.33 U.S. cents at 11:10 a.m. in Wellington from 65.49 cents immediately before the report.
The jobless rate rose from 5.8 percent in the first quarter. Economists expected the increase to 5.9 percent. The rate is climbing from an almost six-year low of 5.5 percent in the third quarter of last year.
The quarterly increase in jobs was the smallest since the first quarter of 2013, the statistics agency said.
Employment rose by 68,000, or 3 percent, from the year-earlier quarter, today’s report showed. Economists had forecast a 3.4 percent gain.
Manufacturing jobs rose about 25,000 to make the biggest contribution to the annual increase.
The participation rate fell from a revised 69.5 percent in the first quarter. The working-age population rose by a record 24,000 people in the second quarter but just 10,000 entered the labor force in the quarter and not all were successful in finding jobs, the statistics office said.
The labor force has been boosted by record net immigration, which has lifted the supply of workers and allowed employers to fill positions without putting upward pressure on wages.
Ordinary time wages for non-government workers rose 0.5 percent from the first quarter, when they gained 0.3 percent, according to the labor cost index also published by the statistics agency today. Economists expected a 0.5 percent increase.
From a year earlier, non-government wages rose 1.8 percent, matching the pace in the first quarter.