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ANZ Forecasts Small Rise in New Zealand's Unemployment Rate in June Quarter

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New Zealand's unemployment rate is expected to rise 0.2 percentage points to 5.5% in the June quarter after some firms paused hiring in the wake of heightened global uncertainty and oil price shock, according to a Tuesday note by ANZ Research.

The employment rate is expected to be unchanged quarter over quarter, while the participation rate is forecast to fall by 0.1 percentage points to over 70%. The working‑age population is anticipated to increase by 0.3%.

The ongoing weakness in the labor market should keep wage pressures contained, with annual wage growth measured by the LCI slowing 0.1 percentage points to 1.9% and the QES measure of private sector wages expected to slow 0.7 percentage points to 2.8% on an annual basis, ANZ said.

This suggests that the labor market is unlikely to become a renewed source of accelerating consumer price index inflation pressures, with wage-price spiral risks mitigated.

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