The New Zealand unemployment rate jumped to the highest level in 9 years to 6.0%, overshooting expectations by 0.3 percentage points. Worse-than-expected labor data for the three months ending June saw the 1.0 percentage point rise become the largest of such quarterly increases in the country's history. Those participating in the labor force, as a percentage of those eligible, remained even - implying that a loss of jobs was the main culprit for the rise in the rate. Recently released wage data had given a clue that the labor market would probably prove to be worse than forecast. On Tuesday, it was announced that private sector wages had risen at their slowest pace in nearly 10 years. In our report, we stated that expectations for the unemployment rate were probably too optimistic, given the poor health of wages. Nonetheless, our conclusion is that this week's data may ultimately be beneficial for New Zealand as it seeks to weaken its currency in an effort to bolster its export sector.
