The Statistics Agency in New Zealand released labor market data for the country during the last quarterly period of 2024, which ended in December, late last Tuesday evening. The results were mixed compared to market expectations.
According to the issued data, employment levels in New Zealand contracted by about 0.1% in the second quarter compared to the previous quarter, while the market had anticipated a contraction of about 0.2%. This performance was better than expected, following a reported contraction of 0.6% in employment, which was revised from a contraction of about 0.5% in the third quarter.
At the same time, the unemployment rate in New Zealand rose during the second quarter to 5.1% year-on-year, marking the highest unemployment rate recorded in New Zealand since the third quarter of 2020.
The new reading matched market expectations, which also indicated a rise in unemployment to 5.1%, but it was worse than the previous reading that showed an increase in the unemployment rate in New Zealand to 4.8% during the third quarter of last year.
Changes in employment are considered a leading indicator for measuring consumer spending, as they reflect the overall performance of the economy. Although the reading was released very late, it is seen as an early indicator of employment conditions in New Zealand and typically has a strong impact on currency markets.
The number of unemployed individuals also serves as an indicator of the economy's health, as consumer spending is closely linked to labor market conditions. Additionally, the unemployment rate is a significant factor in the decisions of the monetary policy committee. An increase in this indicator signifies a decline in labor market performance in New Zealand.
