My subscription
My Subscription All Publications

New Zealand- Labour Market (Q3 2021)

The decline in the unemployment rate to 3.4% should encourage the RBNZ to hike rates more aggressively than we had previously anticipated in the months ahead.
Ben Udy Australia and New Zealand Economist
Continue reading

More from Australia & New Zealand

Australia & New Zealand Data Response

Australia Retail Sales (May 2022)

The strong rise in retail sales in May highlights the strength in the Australian economy and is consistent with our view that the RBA will continue to hike rates aggressively in the months ahead.

29 June 2022

RBA Watch

RBA to keep hiking by 50bp for now

The Reserve Bank of Australia will probably lift the cash rate by another 50bp in July and August before reverting to smaller 25bp hikes. However, the risks are tilted towards a prolonged period of aggressive tightening and rates may well peak above our current forecast of 3%.

28 June 2022

Australia & New Zealand Economics Weekly

More 50bp hikes coming

We agree with RBA governor Phillip Lowe that market pricing for the Cash rate looks too aggressive. But we also think the consensus is still too dovish. After all, Governor Lowe is starting to grow concerned that wage growth will be too strong to allow the Bank to meet its target. And the RBA is still lagging behind a number of its peers in its hiking cycle. We therefore expect the RBA to hike rates to a peak of 3.1%, higher than the analyst consensus of a peak of 2.60%.

24 June 2022

More from Ben Udy

Australia & New Zealand Chart Book

Surging inflation puts pressure on monetary policy

Trimmed mean inflation rose to 2.1% in Australia in Q3, the first time it has entered the RBA’s 2-3% target band since 2015. Even more strikingly, trimmed mean inflation in New Zealand rose to 4.4%, way above the top end of the RBNZ’s 1-3% target. One driver of the strength in both countries has been the surge in the cost of building a new home, which rose 3.3% q/q in Australia and 4.5% in New Zealand. Construction businesses are still reporting high input costs so home building inflation could push underlying inflation even higher in the quarters ahead. Rising food and energy prices provide additional upward pressure. Indeed, central banks have started to respond. If the labour market remains resilient, the RBNZ could hike rates by 50bp in November. And while stronger wage growth will be necessary before the RBA begins hiking, we think the strength in underlying inflation will encourage the RBA to continue tapering its asset purchases from February.

29 October 2021

Australia & New Zealand Data Response

Australia Retail Sales (Sep. 2021)

The rise in retail sales in September means that the trough in consumption is now behind us. We expect retail sales to rebound in Q4 as restrictions relax and a growing number of Australians are able to resume their normal lives.

29 October 2021

Australia & New Zealand Data Response

Australia Consumer Prices (Q3 2021)

The decline in headline inflation in Q3 was entirely driven by base effects. More importantly, the strong rise in underlying inflation will keep pressure on the RBA to keep reducing monetary stimulus.

27 October 2021
↑ Back to top