New Zealand Dollar: Labor market soft, RBNZ hike eyed – TD Securities

TD Securities’ Australia/NZ macro team sees New Zealand Employment growth at 0.1% q/q in Q2, insufficient to match population gains. They expect the Unemployment Rate to rise to 5.4%, returning to its recent cycle high and aligning with the RBNZ’s May forecast. With activity rebounding into Q3, they anticipate another 25bp RBNZ rate hike in September.

Unemployment up, hike still likely

"Employment growth likely edged up by 0.1% q/q based on monthly filled jobs data, but the pace is unlikely to have kept up with population growth."

"We expect the unemployment rate to edge higher to 5.4% (consensus: 5.4%) from 5.3% in Q1, and back to its recent cycle high from Q4 2025."

"This is in line with the RBNZ's May forecast."

"Activity seems to have rebounded into Q3, and we expect the RBNZ to hike again by 25bps in September."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)