Kiwi lovers experienced losses in their holdings for the second day after the number of people employed in New Zealand dropped suddenly in the second quarter, disappointing expectations.
Statistics New Zealand released early on Wednesday employment data for the June 2017 quarter. After six quarters of employment growing positively, the number of employees dropped by 0.2% (4,000 people quarter-on-quarter), surprising analysts who anticipated instead for growth to slow down to 0.7% from 1.2% in the previous quarter. In addition, the participation rate went down to 66.7% compared to 67.1% in the March quarter. A reason for this downfall was mainly a rise in working-age population which expanded by 20,000 people (0.5%) in the June quarter and fell below the employment growth for the first time since September 2015.
The unemployment rate for the given period, pulled back as expected by 0.1 percentage points to 4.8%, which is the lowest rate seen since December 2008 when it stood at 4.4%.
Turning to labour costs, the recent increase in minimum wages pushed up the labour cost index from 1.6% to 1.7% year-on-year, as expected, while on a quarterly basis the index was in line with forecasts as well, standing flat at 0.4% for the eighth consecutive quarter.
Following the data, the kiwi tumbled immediately by 0.72% to a session low of $0.7415 from $0.7469 prior the data release. However, the currency managed to recover to $0.7430 towards the end of Asian trading.
