4 Feb 2014
Flash: Expect a strong New Zealand jobs report - BNZ
FXStreet (Bali) - According to Craig Ebert, Senior Economist at Bank of New Zealand, Wednesday’s Q4 labour market data in New Zealand is likely to be strong.
Key Quotes
"A further fall in the HLFS unemployment rate would make a lot of sense. It would certainly fit with the many other indications of a tightening jobs market – whether in skilled or unskilled – in spite of rising immigration and the way it’s boosting labour supply growth. This could also be why consumer confidence is now riding high (something highlighted by the Reserve Bank in its recent commentary)."
"As for the hard numbers, we are going with a 0.2 point dip in the jobless rate for Q4, to 6.0%, a quarterly advance of 0.5% in jobs, along with the participation rate dipping a fraction, to 68.5%."
"Our gut feel is that one of these indicators could exhibit much more heat, but we have no strong conviction which. It might seem a stretch to expect a second successive quarterly jump in jobs following Q3’s screamer of 1.2%. But then staffing intentions have been skyrocketing over the last 6-12 months, and so it might not seem unreasonable. If we do see another strong increase in Q4 employment, the unemployment rate could easily dip well below the 6.0% level we anticipate."
"Unless, of course, the robustness in the Q4 labour market data is expressed more in the participation rate than anything else. If this measure rises forcefully it would, technically speaking, make it hard for the unemployment rate to go down. Yet participation spiked quite a bit in Q3, to 68.6%, so, who knows, maybe it struggles to hold up so high, even with increased employment? It’s another reason to wonder about a sharper fall in the Q4 unemployment rate than we expect."
As for market expectations they are for a 0.5/0.6% increase in Q4 HLFS employment (for 2.4% y/y), a steady participation rate of 68.6%, and an unemployment rate of 6.0%. In its December MPS the RBNZ published a 6.0% expectation for the Q4 unemployment rate.
"The labour market will be crucial for judging the economy and the path of monetary policy. However, that’s not to ignore how the housing market does post the high-LVR lending restrictions. So keep an eye out for the latest Barfoot and Thompson housing statistics, which will probably come out before the week’s end. The key number for us will be sales. We expect a level of around 750 for January. This would be consistent with the notion of less steam in the market but still enough to maintain upward pressure on prices."
Key Quotes
"A further fall in the HLFS unemployment rate would make a lot of sense. It would certainly fit with the many other indications of a tightening jobs market – whether in skilled or unskilled – in spite of rising immigration and the way it’s boosting labour supply growth. This could also be why consumer confidence is now riding high (something highlighted by the Reserve Bank in its recent commentary)."
"As for the hard numbers, we are going with a 0.2 point dip in the jobless rate for Q4, to 6.0%, a quarterly advance of 0.5% in jobs, along with the participation rate dipping a fraction, to 68.5%."
"Our gut feel is that one of these indicators could exhibit much more heat, but we have no strong conviction which. It might seem a stretch to expect a second successive quarterly jump in jobs following Q3’s screamer of 1.2%. But then staffing intentions have been skyrocketing over the last 6-12 months, and so it might not seem unreasonable. If we do see another strong increase in Q4 employment, the unemployment rate could easily dip well below the 6.0% level we anticipate."
"Unless, of course, the robustness in the Q4 labour market data is expressed more in the participation rate than anything else. If this measure rises forcefully it would, technically speaking, make it hard for the unemployment rate to go down. Yet participation spiked quite a bit in Q3, to 68.6%, so, who knows, maybe it struggles to hold up so high, even with increased employment? It’s another reason to wonder about a sharper fall in the Q4 unemployment rate than we expect."
As for market expectations they are for a 0.5/0.6% increase in Q4 HLFS employment (for 2.4% y/y), a steady participation rate of 68.6%, and an unemployment rate of 6.0%. In its December MPS the RBNZ published a 6.0% expectation for the Q4 unemployment rate.
"The labour market will be crucial for judging the economy and the path of monetary policy. However, that’s not to ignore how the housing market does post the high-LVR lending restrictions. So keep an eye out for the latest Barfoot and Thompson housing statistics, which will probably come out before the week’s end. The key number for us will be sales. We expect a level of around 750 for January. This would be consistent with the notion of less steam in the market but still enough to maintain upward pressure on prices."