{"id":145782,"date":"2025-09-15T20:45:22","date_gmt":"2025-09-15T20:45:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/145782\/"},"modified":"2025-09-15T20:45:22","modified_gmt":"2025-09-15T20:45:22","slug":"reserve-bank-recession-indicator-flashes-red","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/145782\/","title":{"rendered":"Reserve Bank recession indicator flashes red"},"content":{"rendered":"<p>I reported last week how New Zealand is facing an employment crisis.<\/p>\n<p>The official Q2 labour force survey from Stats NZ showed that New Zealand\u2019s unemployment rate increased to 5.2% in the second quarter of 2025, up from 4.7% in Q2 2024. The underutilisation rate also rose by 3.5% over the year to 12.8%.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/09\/NZ-spare-capacity.png\" width=\"660\" height=\"560\" alt=\"NZ labour market spare capacity\"\/><\/p>\n<p>As illustrated below by Justin Fabo from <a href=\"https:\/\/www.antipodeanmacro.com\/\" rel=\"nofollow noopener\" target=\"_blank\">Antipodean Macro<\/a>, Stats NZ\u2019s\u00a0filled jobs data for Q2 2025 also fell by 0.5% over the quarter and by 1.7% year-on-year.<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/09\/NZ-filled-jobs.png\" width=\"660\" height=\"566\" decoding=\"async\" loading=\"lazy\" alt=\"NZ filled jobs\"\/><\/p>\n<p>New Zealand wage growth has also collapsed as the supply of workers far outstrips demand from employers.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/08\/NZ-wages.png\" width=\"660\" height=\"562\" decoding=\"async\" loading=\"lazy\" alt=\"NZ wage growth\"\/><\/p>\n<p>Advertisement<\/p>\n<p>This week, Stats NZ will release the Q2 national accounts for New Zealand, which is expected to record a contraction in GDP.<\/p>\n<p>The Reserve Bank\u2019s latest <a href=\"https:\/\/www.rbnz.govt.nz\/research-and-publications\/research\/our-research-and-analysis\/kiwi-gdp-growth-nowcasts\" rel=\"nofollow noopener\" target=\"_blank\">Kiwi-GDP Nowcast<\/a>, which is updated every Friday, forecasts that New Zealand\u2019s GDP contracted by 0.4% in Q2 2025.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/09\/NZ-GDP-nowcast-1.png\" width=\"660\" height=\"405\" decoding=\"async\" loading=\"lazy\" alt=\"NZ GDP Nowcast\"\/><\/p>\n<p>Advertisement<\/p>\n<p>The Reserve Bank\u2019s nowcast was revised lower following the final partial GDP indicators released last week, which showed the manufacturing sector\u00a0in retreat in Q2 and negligible growth in a range of services industries.<\/p>\n<p>The good news is that the high-frequency data suggests that growth has returned in Q3.<\/p>\n<p>The Performance of Manufacturing and Performance of Services indexes have improved recently and some discretionary spending types in the Stats NZ and bank card-spending data are showing signs of life.<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/09\/NZ-domestic-card-transations.png\" width=\"660\" height=\"555\" decoding=\"async\" loading=\"lazy\" alt=\"NZ domestic card transactions\"\/><\/p>\n<p>That said, housing momentum has remained weak, with prices and dwelling construction continuing to fall.<\/p>\n<p>As a result, New Zealand\u2019s economy continues to operate with considerable spare capacity.<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/09\/NZ-OCR.png\" width=\"660\" height=\"359\" decoding=\"async\" loading=\"lazy\" alt=\"NZ OCR\"\/><\/p>\n<p>This is why the Reserve Bank signalled two further 25 bp rate cuts at the August MPS, which would lower the official cash rate to 2.50% from a peak of 5.5%.<\/p>\n","protected":false},"excerpt":{"rendered":"I reported last week how New Zealand is facing an employment crisis. The official Q2 labour force survey&hellip;\n","protected":false},"author":2,"featured_media":145783,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-145782","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/145782","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=145782"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/145782\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/145783"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=145782"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=145782"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=145782"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}