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.