Labor market conditions weaken as unemployment rate climbs

  • New Zealand’s unemployment rate rose to 3.9% in the third quarter
  • Underutilization rate climbed to 10.4% in the third quarter
  • Labor market conditions have eased due to higher interest rates and increased supply of workers
  • Reserve Bank of New Zealand unlikely to increase official cash rate in November
  • Private sector labor costs grew less than forecasted
  • Unemployment rate expected to rise to 4.4% by the end of the year
  • Supply of labor to continue growing, pushing unemployment rate to around 5.0% by 2024

New Zealand’s unemployment rate rose sharply in the third quarter, reaching 3.9%. The underutilization rate also increased to 10.4%. These changes can be attributed to higher interest rates and a larger supply of workers due to solid immigration rates. The Reserve Bank of New Zealand is unlikely to raise the official cash rate in November. Additionally, private sector labor costs grew less than expected. The unemployment rate is projected to rise to 4.4% by the end of the year, and the supply of labor is expected to continue growing, potentially pushing the unemployment rate to around 5.0% by 2024.

Factuality Level: 8
Factuality Justification: The article provides specific data and quotes from economists to support its claims about the rise in New Zealand’s unemployment rate and the factors contributing to it. The information is sourced from StatsNZ and includes projections from the Reserve Bank of New Zealand. There is no obvious bias or opinion masquerading as fact in the article.
Noise Level: 7
Noise Justification: The article provides information on the rise in New Zealand’s unemployment rate in the third quarter due to higher interest rates and increased supply of workers. It includes quotes from economists and mentions the impact on the Reserve Bank of New Zealand’s projections. However, the article lacks in-depth analysis, evidence, and actionable insights. It also does not explore the consequences of the rising unemployment rate on individuals or the economy.
Financial Relevance: Yes
Financial Markets Impacted: The article provides information on the New Zealand labor market, which can have implications for the country’s economy and financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the rise in New Zealand’s unemployment rate and the cooling job market due to higher interest rates and increased supply of workers. While this is not an extreme event, it has financial implications as it can affect the country’s economy and labor market conditions.
Private Companies: Westpac,ASB
Key People: Darren Gibbs (senior economist at Westpac), Mark Smith (senior economist at ASB)

Reported publicly: www.marketwatch.com