Job creation in New Zealand unexpectedly slipped in the second quarter and wage growth loitered, official data showed on Wednesday, adding weight to the prospect of the central bank keeping rates on hold at record lows for years. The job creation rate fell by 0.2 percent in the three months to end-June, data from Statistics New Zealand showed, versus analysts' forecasts of a 0.7 percent rise.
Quarterly wage inflation remained at a sluggish 0.4 percent, but was up 1.6 percent on an annual basis and in line with economists' expectations. The surprise contraction in job growth and listless wage inflation spooked investors, sending the New Zealand dollar to a one-week low of $0.7426 from around $0.7466 before the data was published.
The unemployment rate slipped, in line with expectations, to 4.8 percent, a level last hit in the third quarter of 2016, which was then an eight-year low. Economists said the fall in unemployment was largely due to the participation rate slipping 0.6 percentage points to 70 percent, meaning the overall pool of people looking for work was smaller and there were more jobs to go round.
The Reserve Bank of New Zealand (RBNZ) has expressed concern that robust economic growth and industry complaints of labour shortages in high-skilled sectors such as technology and construction, have not led to broad-based growth in wages.