Mecklai graph of the day: Kiwis Jobless rate zoomed to 13.5 year high. New Zealand's unemployment rate jumped to a 13-year high of 7.3 percent in the three months to Sep. 30from 6.7 percent in the June quarter.
New Zealand's unemployment rate jumped to a 13-year high of 7.3 percent in the three months to Sep. 30from 6.7 percent in the June quarter. It was the third straight quarterly rise in unemployment and the highest reading since the March 1999 quarter. It further evidence of a patchy recovery that points to interest rates being held at a record low at 2.5 percent and increase the expectations of another round of rate cut. This suggests there is no sign of the labor market picking up and possibly it has worsened up. New Zealand's economy has struggled to gather momentum after the global crisis, recession and earthquakes.
Immediate reaction was seen in New Zealand dollar that fell by 60 pips to test a fresh 2 week low at 0.8129. The New Zealand and Australian economies fared better than many around the world following the global financial crisis; this was evident from resilience seen in their respective strength in currencies. Going ahead, risk aversion intensifies globally, domestic slowdown prevails and with strong currency hurting exports could keep unemployment rate at elevated level.
The below graph shows the movement of Unemployment rate since Jan 2000.
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