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Weekly Overview February 4 2016

Weekly Overview February 4 2016

Labour Market an Area of Strength

Two weeks ago I listed reasons why despite the dairying downturn growth in the NZ economy would remain good especially compared with other countries and this would limit scope for lower interest rates, support jobs growth, and keep the NZD from falling much.

This week has brought a surge in others saying the same thing. One trigger was the better than expected labour market numbers yesterday showing a fall in the unemployment rate from 6% to 5.3% and 0.9% jump in jobs in the December quarter despite dairying weakness. Another was the jump in net migration over calendar 2015 to 65,000 or 1.4% of the population from a negative flow during 2012.

Regarding interest rates the Reserve Bank Governor yesterday reminded everyone that the RB concentrates not just on the headline inflation rate of 0.1% when setting policy, but core inflation which is currently near 1.6% or so, and issues of financial stability and avoiding volatility. His comments have reduced growing expectations of another rate cut and helped the NZD to end this afternoon two cents higher than a week ago against the Australian and US dollars.

ENDS

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Trade Agreements: TPP Minus US Starting To Gain Ground

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PACER:

Prices Up 2.2%: Annual Inflation Highest In Over Five Years

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Undertaxed? NZ Income Tax Rate Second Lowest Among Developed Nations

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Cyclone Cook: Round Up Of This Week’s Weather

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Earlier: Batten Down The Hatches For Cyclone Cook

Although fast-moving, Cyclone Cook will be destructive and MetService Expert Meteorologists have issued Severe Wind Warnings for the whole of the North Island apart from Northland... More>>

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