Our take on the latest Labour market statistics (Tue 6 Aug 2019)
Labour cost inflation edges higher to 2.1%pa
Unemployment falls to 3.9%
Employment grew 0.8% over the quarter
The key numbers...
- Employment growth was faster than expected in the June quarter as part-time employment recovered some of its losses from the previous six months.
- Labour costs continue to edge up as a tighter labour market gives employees more bargaining power and the effects of the April 1 minimum wage increase showed through in lower-skilled wage growth.
- Although labour market indicators performed well in the quarter, we still expect the Reserve Bank to signal intentions of a further OCR cut later this year at tomorrow’s Monetary Policy Statement.
Unemployment rate
Seasonally adj., unemployment as a % of labour force
...and our reaction
- Employment growth increased 0.8% in the June 2019 quarter, which was an improvement from a 0.1% fall in employment over the previous six months.
- The seasonally adjusted unemployment rate fell to 3.9%, as the number of unemployed dropped to its lowest level since December 2008.
- Labour cost inflation reached 2.1%pa, the fastest growth rate since December 2011.
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