The New Zealand dollar sold-off sharply as Statistics New Zealand (SNZ) released its employment data for Q4 of 2016, which showed the unemployment rate rising to 5.2 percent. An increase of 0.3 percent compared to the unemployment rate for Q3 of 2016, which was 4.9 percent.
Mark Gordon, labour and income statistics manager at SNZ, explained that a lot of new workers entered the labour force in the last quarter of 2016, "But while the number of people in employment has risen, so has the number of unemployed people.," he adds.
In their press release, Statistics New Zealand also mentioned the uptick in the labour force participation rate to an all-time high of 70.5 percent.
“The retail trade, accommodation, and food services industry was the largest contributor to employment growth over the latest quarter. This was followed closely by the construction and the professional services industries.”Despite the uptick in the labour force participation rate, the currency markets did not take kindly to the rise in the unemployment rate.
At press time, the New Zealand dollar is down close to 0.75 percent against the U.S. dollar:
NZD flag photo credit: Christoph Strässler