New Zealand Dollar tumbles following underwhelming employment data

Mike Hewitt/Getty Images

New Zealand’s unemployment rate held steady in the first quarter, bucking expectations for a decline to 5.5%. It remains at the equal-highest level seen since Q1 2014.

Just as the headline number underwhelmed so too did employment growth, rising just 0.7% against expectations for an increase of 0.8%, leaving the annual rate of change at 3.2%. Tripling that increase, the number of unemployed persons jumped by 2.1%. Despite the sharp increase the number still sits 0.6% below the levels of a year earlier.

Keeping with the theme of the employment report the information on labour costs also underwhelmed with quarterly growth of 0.3% reported. While up for nine consecutive quarters, the figure was below the 0.5% level of Q4 2014 and expectations for a further increase of 0.4% and marked the slowest pace of growth since Q4 2012. Understandably, with the quarterly reading undershooting, the annual increase slowed to 1.7% from 1.8% seen previously.

The market reaction to the data has been stark. Here’s the New Zealand-US Dollar 5-minute chart following the release.

And the Australian Dollar-New Zealand Dollar cross.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.