An expected shift in momentum.
The New Zealand economy has dodged a technical recession and seen stronger-than-expected economic growth in the June quarter, with conditions in the labour market also defying some of the gloom.
The latest GDP figures show that the economy grew by 0.9% in the June quarter, following a flat (0.0%) March quarter instead of which Stats NZ had previously recorded as a negative.
This means that the technical recession which looked certain back in March has not eventuated, raising hopes that the economy may have seen the worst.
The labour market has been looking considerably weaker over recent months, with job ads down and the unemployment rate moving higher.
However, it has been far from a collapsing labour market. And, after four consecutive months of declining job ads, there was a small bounce in August.
The labour market seems to be showing signs of underlying strength in the face of challenging conditions across the economy. It seems likely that the unemployment rate will still move higher, but it may not be as bad as was expected just a few months ago.
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