Political & Economic week ahead: crucial job data this week
Rob Hosking gives his in-depth analysis on the big stories to watch out for this week on NBR Radio and on demand via MyNBR Radio.
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The scope of the slowdown will dominate the week’s economic news. More global dairy price auction figures are to be released on Wednesday and a further slide is expected. The question right now is whether the downward momentum from a massive 11% fall of a fortnight ago is continued or whether it slows.
What will be watched closely is the effect on the New Zealand exchange rate. The currency has fallen 25% against the US dollar in the past 12 months, and 15% on a trade weighted index (TWI) basis. The New Zealand exchange is expected to continue to fall over the rest of this year: the question is at what pace and how far.
Domestically, the big news is job market data. Both employment and unemployment have been rising over the past year, an unusual combination fuelled by strong economic growth, high net immigration, and the government’s encouragement of beneficiaries to find work.
Unemployment, which bottomed out at 5.4% last September, has been on the climb since and currently stands at 5.8%. It is likely to hit 6% or beyond by the end of the year: hiring, while still increasing, is now growing at a slower rate but the size of the workforce is not.
Hours worked – a good economic indicator – have been growing by more than 3%, on an average annual basis, since 2013, although the increase fell to 2.7% in the most recent quarter.
This is still, however, a faster annual rate than anything seen since the mid-1990s.
On the political front this week, Parliament is not sitting but the job data – which will be released late on Wednesday morning – will generate the usual fireworks, particularly if, as expected, the rate of unemployment rises.
NBR Radio
Mon, 03 Aug 2015
Mon, 03 Aug 2015
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Political & Economic week ahead: crucial job data this week
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