(Bloomberg) -- New Zealand employment fell for a fourth straight month in July, the longest slump since early 2009 when the economy was emerging from the global financial crisis.
Filled jobs dropped 0.1% following a revised 0.3% decline in June, Statistics New Zealand said Wednesday in Wellington, extending a slowdown that began in April. The last time the series had such a sustained decline was when it fell for five straight months through March 2009.
High interest rates have potentially tipped the economy into its third recession in less than two years, prompting companies to stop hiring. The central bank this month cut its benchmark interest rate earlier than it had previously forecast, citing a slowdown in demand that is curbing inflation.
“The labor market has turned and is starting to cool,” said Mark Smith, senior economist at ASB Bank in Auckland. “The risks are tilting toward a third-quarter contraction in hiring and a rise in the unemployment rate toward 5%.”
The jobless rate rose to 4.6% in the second quarter, less than expected as the economy unexpectedly added jobs.
Today’s report showed filled jobs fell by more than 25,000 or 1.1% since peaking at almost 2.4 million in March.
Most local economists and the RBNZ predict the economy will contract in the second and third quarters of 2024. The central bank expects the jobless rate to rise to 5.4% by early 2025.
“We continue to expect the labor market to progressively loosen heading into 2025, with the balance of power to progressively move in favor of employers,” said Smith. “The primary driver is expected to be the weaker demand for labor, with anemic economic activity over 2024. Pressures on profitability are also expected to significantly constrain future rises in employment.”
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