New Zealand's weak employment data is spurring financial experts to boost the likelihood of a November official cash rate cut (OCR).
The data released on Wednesday showed an additional 10,000 Kiwis lost their jobs in the March quarter - in line with the Reserve Bank's (RBNZ) forecasts.
With the 0.3 percentage point rise, the unemployment rate was the highest since the 4.6 percent recorded in March 2021. In 2020, after the COVID-19 pandemic unfolded, unemployment peaked at 5.2 percent.
The average salary and wage growth of Kiwi employees decelerated to an annual rate of 4.1 percent in March from 4.3 percent in December.
Analysts have said the Reserve Bank would be getting close to leaning towards rate cuts later this year, given the recession and the economy showing ongoing signs of weakness.
"This labour report: it was weak but it doesn't show the employment market falling off a cliff yet," Milford Asset Management investment analyst Katlyn Parker told AM.
"What it likely did was give the market a bit of dose of reality that things are changing and this monetary policy that we have seen - it is starting to impact."
The RBNZ has repeatedly stated it would only consider OCR cuts once it's convinced inflation - currently at 4 percent - was on track to fall back within its target range of between 1 and 3 percent.
"Before... the market was expecting the cuts to start the end of this year - in November - and after the report, they got more conviction of this," Parker said.
"So, they're putting a higher probability that we will get the first cut in November but, look, all this report is telling us right now is that things are softening and they are on the way down - but it's from a pretty high level."
Over the year, the unemployment rate was likely to rise to 5 percent before falling to 4.9 percent in early 2026, according to RBNZ forecasts.
