New Zealand reported a 0.1% quarter-on-quarter dip in employment for Q4 2024, smaller than the projected reduction of 0.2%, but the unemployment rate still rose from 4.8% to 5.1% as expected.
The previous quarter suffered a downgrade to show a 0.6% quarterly reduction in hiring versus the initially reported 0.5% decline.
Key Takeaways:
- Unemployment rate increased to 5.1% in Q4 2024, up from 4.8% in Q3
- Employment rate fell to 67.4% from 67.7% in the previous quarter
- Annual wage growth rose 3.3% year-over-year, outpacing inflation at 2.2%
- Underutilization rate climbed to 12.1% from 11.6%, indicating growing labor market slack
- Total employed persons decreased by 32,000 compared to December 2023
Link to official New Zealand Labour Market Statistics (Q4 2024)
Components of the report also revealed that labor force participation dipped from 71.1% to 71% in the December quarter. The decline in employment was particularly pronounced in technical, administrative, and machinery operator roles, while community and personal service workers saw notable gains.
Market Reactions
New Zealand Dollar vs. Major Currencies: 5-min
Overlay of NZD vs. Major Currencies Chart by TradingView
The Kiwi, which had been edging slightly lower against most of its peers leading up to the jobs release, had a generally bearish reaction to the numbers as traders likely focused on the uptick in the unemployment rate and negative revision to Q3 2024 data.
Initial losses were most pronounced against the Canadian dollar, which had been on relatively stronger footing a few hours prior to the report, as well as the Swiss franc. However, the Kiwi was able to pull higher across the board a few hours after the employment report was printed, erasing its initial losses except against the strengthening Japanese yen.
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