BNZ tips OCR to hit 1% by end of the year after record drop in unemployment
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ANZ and BNZ tip OCR to hit 1% by year-end after record drop in unemployment
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Kiwibank chief economist Jarrod Kerr believed the unemployment number “all but confirms a rate hike from the Reserve Bank in August”, describing it as another upside surprise. Statistics NZ senior manager Sean Broughton said the drop in unemployment was largely in line with other labour market indicators, including declining numbers of beneficiaries, rising job vacancies, “and recent media reports of labour shortages and skills mismatches”. The number of people reporting they were “underutilised”, for example because they were working fewer hours than they wanted, also plummeted, falling by 48,000 people or 13.3 per cent over the quarter. Broughton said that big drop showed that spare capacity in the labour market was dwindling and that could lead to upward pressure on wage rates.