Stats NZ’s monthly employment indicators continue to flash red. Filled jobs – a tax-based measure of employment – declined by 0.1% (seasonally adjusted) in July. It follows June’s downwardly revised 0.3% dip. July marked the fourth consecutive monthly decline in the number of filled jobs – the longest stretch since the Global Financial Crisis. But it’s not just the monthly moves that are bringing back memories of 2008. The speed of the decline is also haunting. During the labour market fallout of the GFC, filled jobs dropped a total of 5% in the span of 19 months. Fast forward to today and filled jobs are already down 1.1% from the March 2024 peak. That is, filled jobs are already over a fifth through the GFC-slide, and it’s only been four months! Employment is quickly losing its shine and will drive further labour market softness from here. We expect the unemployment rate to breach 5% by year-end. Capping downside risk is the fact that the RBNZ has already begun the rate cutting cycle, bringing much needed relief to many businesses and households.
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