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New Zealand PMI manufacturing 46.1 in Aug-23

- The New Zealand PMI manufacturing registered a contraction in August 2023 with a reading of 46.1, the lowest level observed since August 2021 and 2.62 points below the one-year average.
- The decline in the PMI indicates a slowdown in the manufacturing sector, potentially affecting employment, consumer spending, and overall economic growth.

New Zealand unemployment rate 3.6% (consensus 3.5) in Q2-23

- New Zealand's unemployment rate increased slightly to 3.6% in Q2-23, surpassing the consensus estimate of 3.5% and reaching the highest level since Q2-21.
- Despite the increase, the unemployment rate remains 2.20 percentage points below the long-run average, indicating ongoing labor market challenges. Meanwhile, employment growth of 0.97% q-o-q in Q2-23 exceeded expectations, suggesting a stronger recovery in job creation.

New Zealand CPI inflation 6.0% y-o-y (consensus 5.9) in Q2-23

- New Zealand's CPI inflation reached 6.0% year-on-year in Q2-23, slightly surpassing the consensus forecast of 5.9%. This represents the lowest growth since Q4-21.
- Quarter-on-quarter CPI inflation increased by 1.1% in Q2-23, exceeding the consensus forecast of 0.9%, indicating ongoing inflationary pressures.

RBNZ: Jul-23

• The Monetary Policy Committee's (MPC) decision to hold the Official Cash Rate (OCR) at 5.5% reflects a commitment to restrain inflation and sustain maximum employment, signaling a likely continuation of this restrictive interest rate level in the foreseeable future.
• Future MPC decisions will be shaped by global economic growth trends, especially monetary policy tightening by central banks internationally and economic conditions in key trading partners like China.
• Domestic factors such as declining inflation expectations, easing of capacity constraints, reduced labour market pressures, and lower house prices, along with mortgage rate trends, will also significantly influence future MPC decisions.