New Zealand unemployment rate jumped sharply in the first three months of this year as the economy slumbered in an extended recession and high interest rates continued to batter household budgets, the Wall Street Journal reported. The seasonally adjusted unemployment rate was 4.3% in the first quarter, well up from 4.0% in the prior quarter, Stats NZ said Wednesday. Over the year to the first quarter, the unemployment rate rose 0.9 percentage points.
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The Reserve Bank of New Zealand left its official cash rate steady at a policy meeting on Wednesday, but signaled that the rate will need to remain restrictive for some time yet given that inflation remains high, the Wall Street Journal reported. The OCR was held at 5.5%, which was widely expected by economists. “While some near-term price pressures remain, the Monetary Policy Committee is confident that maintaining the OCR at a restrictive level for a sustained period will return consumer price inflation to within the 1% to 3% target range this calendar year,” the central bank said.
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New Zealand has entered its second recession in 18 months after the latest round of GDP figures confirmed its economy contracted in the last quarter of 2023, the Associated Press reported. The country’s economy shrank by 0.1% in the quarter to December, and 0.7% in per capita terms, the New Zealand’s official statistics agency, Stats NZ, announced on Thursday. The latest slip follows a 0.3% contraction in the September quarter, which fulfills the technical definition of a recession. It is New Zealand’s second recession event in the past 18 months.
New Zealand’s farm-rich economy was in recession in the final three months of 2023 despite a jump in population growth, with economists now expecting the central bank to fall in line with many of its global peers and deliver interest-rate cuts in the second half of the year, the Wall Street Journal reported. Gross domestic product growth contracted 0.1% in the fourth quarter, following a 0.3% contraction in the third quarter, Stats NZ said Thursday. GDP has contracted sequentially for four out of the past five quarters.
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New Zealand central bank governor Adrian Orr has issued a warning about crypto currencies such as stablecoins, saying they are no substitute for fiat money, Bloomberg News reported. Stablecoins are “the biggest misnomers” and “oxymorons,” Orr told a parliamentary committee Monday in Wellington. “Stablecoins are not stable. They’re only as good as the balance sheet of the person offering that stablecoin.” Stablecoins, a form of crypto token pegged to another asset, use large reserves to support their value.
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New Zealand’s unemployment rate rose to 4.0% in the fourth quarter of last year from 3.9% in the third quarter, further confirming that a slowdown in the economy continues to play out, the Wall Street Journal reported. The unemployment rate rose 0.6 percentage points through 2023, up from 3.4% in the fourth quarter of 2022, Stats NZ said on Wednesday. “Unemployment rates have returned to 2019 levels, following recent historic lows,” Becky Collett, work and wellbeing statistics senior manager at Stats NZ, said.
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New Zealand houses are selling faster as signs that interest rates may have peaked encourage more buyers to enter the market, Bloomberg News reported. The median time to sell a house in December was 36 days, Real Estate Institute of New Zealand data showed Thursday in Wellington. That’s the lowest since March 2022 and down from a peak of 60 days in February last year. House prices in New Zealand are recovering after a prolonged slump that coincided with a steep rise in mortgage interest rates.
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New Zealand’s agriculture-rich economy contracted unexpectedly in the third quarter, raising questions about whether interest rates have risen too far with the economy on track for a return to recession, the Wall Street Journal reported. The economy contracted 0.3% in the quarter, following a revised 0.5% increase in GDP in the second quarter, according to figures released by Stats NZ on Thursday. Economists had expected the economy to grow by 0.2% over the quarter. From a year earlier, the economy contracted by 0.6%, Stats NZ added.
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Air New Zealand said on Tuesday that a change in the servicing schedule of RTX's Pratt & Whitney engines could significantly impact the airline's services for up to two years, Reuters reported. The carrier in October had flagged a nominal financial impact in the first half of 2024 related to the engine issue. Air New Zealand warned in September that the engine inspections would have a "significant" impact on its flight schedule from next year. The airline said on Tuesday it would pause flights connecting Auckland and Hobart from April 5 next year.
New Zealand-based Cooks Coffee Company plans to place its Triple Two coffee franchise business in the UK into an insolvency process, VerdictFoodService.com reported. For this, the company intends to appoint administrators for its franchise business, which includes Triple Two Holdings and its subsidiaries. In a statement, Cooks Coffee Company said: “Triple Two was growing rapidly before the Covid-19 pandemic and had shown continuing momentum in FY22.
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