Back
6 May 2015
Risks around RBNZ OCR settings skewed downwards - ANZ
FXStreet (Bali) - NZ wage inflation ensures the risks around RBNZ OCR settings are skewed downwards, according to ANZ.
Key Quotes
"Consistent with the signal from some leading indicators, the pace of HLFS employment growth moderated fractionally in Q1, although it still painted a solid demand picture overall and suggests a solid start to GDP in 2015."
"However, the main news was again the significant growth in labour supply, with another solid gain in the working age population and record participation ensuring the unemployment rate remained unchanged (at an upwardly revised level)."
"This supply response is capping wage inflation – which surprised on the downside and is even showing signs of further moderation based on some measures – reinforcing that the labour market is at the heart of the current “solid growth but low inflation” conditions the economy is experiencing. It ensures the risks around OCR settings are skewed downwards."
Key Quotes
"Consistent with the signal from some leading indicators, the pace of HLFS employment growth moderated fractionally in Q1, although it still painted a solid demand picture overall and suggests a solid start to GDP in 2015."
"However, the main news was again the significant growth in labour supply, with another solid gain in the working age population and record participation ensuring the unemployment rate remained unchanged (at an upwardly revised level)."
"This supply response is capping wage inflation – which surprised on the downside and is even showing signs of further moderation based on some measures – reinforcing that the labour market is at the heart of the current “solid growth but low inflation” conditions the economy is experiencing. It ensures the risks around OCR settings are skewed downwards."