New Zealand Treasury - there is still some spare capacity in the labour market
|New Zealand Treasury sees some spare capacity in the labor market, according to monthly economic indicators report.
Key points
- The unemployment rate (unemployed as a share of the labour force) has been decreasing since 2012, but underemployed as a share of the labour force has been stable at around 4%. This indicates there is still some spare capacity in the labour market.
- The unemployment rate fell to 4.5% in December, and wage measures were mixed, with annual Quarterly Employment Survey (QES) growth of 3.1%, but Labour Cost Index (LCI) growth unchanged at 1.8%.
- House prices and sales volumes both increased in January.
- Consumption indicators were positive: for the December quarter retail sales volumes rose 1.7% (sa), and in January electronic cards spending rose 1.4% (sa).
- Global 10-year bond yields pushed higher in February as analysts expect a faster pace of tightening of monetary policy in 2018.
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