(Bloomberg) -- New Zealand’s jobless rate rose and wage growth slowed in the first quarter as the Covid-19 pandemic started to push the economy toward recession.
- The jobless rate rose to 4.2% from 4% in the fourth quarter, Statistics New Zealand said Wednesday in Wellington. Economists expected 4.4%
- Employment unexpectedly climbed 0.7% from the previous three months. Economists expected a 0.2% contraction
- The participation rate gained to 70.4% from 70.1% in the fourth quarter
- The Labour Cost Index for non-government workers increased 0.3% in the quarter, slowing from 0.6% in the previous three months. From a year earlier, wages rose 2.4%
Key Insights
- Data collection was mostly complete before the New Zealand government imposed a strict nationwide lockdown on March 25 which forced many businesses to shut their doors
- Unemployment benefit claims have soared and business hiring intentions have slumped, suggesting the jobless rate may rise toward 10% over the course of 2020
- The government introduced a 12-week wage subsidy to help cushion the initial impacts of the recession, and will update its fiscal support plans at the budget on May 14
- The RBNZ is tipped to increase its quantitative easing program from NZ$33 billion at its policy announcement on May 13 as it seeks to cushion the impact of the economic slump on its inflation and employment targets
Market Reaction
- The Kiwi dollar was little changed after the report. It bought 60.61 U.S. cents at 10:52 a.m. in Wellington.
Get More
- New Zealand Economy Gets Back to Work as Lockdown Is Eased
- N.Z. Government Seeks to Limit Jobless Surge With More Stimulus
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