New Zealand’s Unemployment Rate rises to 5.2% in Q2 vs. 5.3% expected

Lallalit Srijandorn FXStreet

New Zealand’s Unemployment Rate rose to 5.2% in the second quarter (Q2) from 5.1% in the first quarter, according to the official data released by Statistics New Zealand on Wednesday. The figure came in below the market consensus of 5.3%.

Furthermore, the New Zealand’s Employment Change arrived at -0.1% in Q2 from an increase of 0.1% in Q1, compared with the consensus forecast of -0.1%. The participation rate in New Zealand decreased to 70.5% in Q2, compared to 70.8% in the previous reading.

Statistics New Zealand labour market spokesperson Jason Attewell said with the key highlights noted below

Labour market conditions have changed considerably in the last few years. Since the June 2022 quarter, the unemployment rate has risen by 1.9 percentage points.

The underutilisation rate has risen by 3.5 percentage points over the same period.

Market reaction to the New Zealand’s employment data

At the time of writing, the NZD/USD pair is trading 0.04% lower on the day to trade at 0.5900.

Employment FAQs

How do employment levels affect currencies?

Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.

Why is wage growth important?

The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.

How much do central banks care about employment?

The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

British Pound eases to 1.3450 area following downwardly revised Manufacturing PMI data

The British Pound is trimming previous gains against the US Dollar on Monday, returning to the mid-range of the 1.3400s down from fresh seven-week highs, above 1.3500 earlier on the day. Weaker-than-expected UK manufacturing data added pressure on the Pound, which rallied at the Asian session opening, amid news of a halt to the hostilities in Iran.

EUR/USD remains under pressure; looks at 1.1500 on firm US ISM

EUR/USD now accelerates its downtrend and trades in the low 1.1500s on the back of the marginal improvement in the US Dollar, all in the wake of solid US ISM Manufacturing data on Wednesday. The Greenback, in the meantime, remains far from a sustainable rebound in the current context of cooling geopolitical tensions.

Gold remains supported near $4,000

Gold adds to Friday’s pullback, although it remains well underpinned by the key $4,000 threshold per troy ounce on Monday. The US Dollar’s inconclusive price action seems enough to cap the yellow metal’s potential upside, although renewed hopes for a US-Iran peace deal and fading expectations of a Fed rate hike could limit the Greenback’s recovery.

Week ahead: US payrolls report and AI earnings to keep investors on edge

After the Fed decision, NFP report awaited for more rate hike clues. Employment also on the agenda in Canada and New Zealand. Chinese trade and Japanese wage data to be watched too. But Iran and AI headlines to remain in driver’s seat for risk sentiment.

The Bitcoin futures yield collapse: Once over 20%, now less than Treasury notes

Once a goldmine for carry traders, Bitcoin futures have flipped, consistently underperforming plain‑vanilla U.S. Treasuries every month since February. Carry trades consistently yielded 20% or more across regulated and unregulated crypto exchanges during the 2021 bull market. The strategy involved shorting Bitcoin futures while simultaneously buying a spot exchange-traded fund (ETF).

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.