Unemployment Rate Rises, Influencing Official Cash Rate Cut

Highlights:

• Unemployment rate rises to 5.1% in the December quarter, a four-year high, up from 4.8% in the
• previous quarter.
• Employment rate declines to 67.4%, marking the largest annual fall, compared to 69% a year ago.
• Reserve Bank of New Zealand (RBNZ) is expected to cut the Official Cash Rate by 50 basis points to 3.75% based on the latest data.

The latest Stats NZ data for the December quarter reveals that New Zealand's unemployment rate has risen to 5.1%, a significant increase from 4.8% in the September quarter. This marks a four-year high and remains above the 25-year average of 4.8%, according to Mark Lister, Investment Director at Craigs Investment Partners. The change in unemployment levels is expected to keep the Reserve Bank of New Zealand (RBNZ) on track to lower the Official Cash Rate (OCR) by 50 basis points to 3.75% this month.

Unemployment Rate Hits Four-Year High

The seasonally adjusted unemployment rate for the December quarter was 5.1%, surpassing the previous quarter's figure of 4.8%. This rise has been attributed to various economic factors, including global challenges and the ongoing adjustment to post-pandemic conditions. With this increase, the current unemployment rate is also higher than the country's 25-year average.

Employment Rate Decline

Alongside the rise in unemployment, the total employment rate also saw a decline, dipping to 67.4% in the December quarter. This is lower than both the 69% recorded a year ago and the 67.7% rate in the September quarter. This marks the largest annual fall in employment levels, adding further pressure on the RBNZ's monetary policy decisions.

At the time of writing, the Reserve Bank of New Zealand is expected to maintain its focus on these economic indicators as it makes its decision regarding the OCR, with inflation and employment figures remaining key factors in shaping future policy.

Disclaimer for Kapitales Research

The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.

Customer Notice:

Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.

Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com