Analysts at TD Securities note that, even as New Zealand’s economy is showing signs of slowing, the labour market has held up remarkably well.

• “With the unemployment rate dropping to an 11yr low to 3.9% in Q2, we pencil in a mild reversal for Q3 to 4.1%, an outcome that should not alarm the Bank given its Aug MPS forecasts are ~4.2%. For wages ex-overtime we forecast a +0.5% gain, placing annual wage growth at 2.2%.”