Markets muted after ‘ridiculous’ employment data

BNZ head of research Stephen Toplis said the employment rate was verging “on the ridiculous” and may not be sustainable.

The headline unemployment rate, at 3.6%, is well below the Reserve Bank of New Zealand’s (RBNZ) estimated threshold of where the hot labour market starts to cause inflation.

Toplis said the central bank hiking the cash rate by 50 basis-point at its November meeting couldn’t be ruled out, but BNZ was not forecasting it.

Westpac’s chief economist Michael Gordon, on the other hand, said the data showed the NZ economy had “shot the lights out” and that the RBNZ will “need to take more action to cool things down”.