New Zealand Treasury - there is still some spare capacity in the labour market

New Zealand Treasury sees some spare capacity in the labor market, according to monthly economic indicators report.

Key points

The unemployment rate (unemployed as a share of the labour force) has been decreasing since 2012, but underemployed as a share of the labour force has been stable at around 4%. This indicates there is still some spare capacity in the labour market.
The unemployment rate fell to 4.5% in December, and wage measures were mixed, with annual Quarterly Employment Survey (QES) growth of 3.1%, but Labour Cost Index (LCI) growth unchanged at 1.8%.
House prices and sales volumes both increased in January.
Consumption indicators were positive: for the December quarter retail sales volumes rose 1.7% (sa), and in January electronic cards spending rose 1.4% (sa).
Global 10-year bond yields pushed higher in February as analysts expect a faster pace of tightening of monetary policy in 2018.

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