New Zealand woke to nasty shock this morning with the release of its Q3 unemployment figure which rocketed 0.5% to 7.3% versus expectations of a slight fall.
I have no special insights to offer into the New Zealand economy but can observe that it, like here, it’s struggling with a grossly over-valued currency:
Bloomie described the result this way:
Falling employment adds to signs of slower economic growth in the second half as global demand weakens and the New Zealand dollar’s 5.3 percent gain against its U.S. peer in 2012 forces companies to close plants and fire workers. Central bank Governor Graeme Wheeler yesterday said the exchange rate is an “issue of concern” for exporters and manufacturers who compete with imports.
This is despite rising house prices and ongoing strong growth emanating from the Christchurch reconstruction. A bad omen for us
Here is HSBC’s take.
121108 New Zealand Unemployment Jumps – A Significant Downside Surprise
