The strengthening of New Zealand's labor market began to slow in the fourth quarter of 2022, signaling that the central bank may reduce the rate of interest rate hikes.
Statistics New Zealand reported the unemployment rate rose to 3.4% compared to expectations for no change at 3.3% in the fourth quarter.
Meanwhile, quarterly employment growth slowed to 0.2% from 1.3% in the previous quarter, missing expectations for a 0.3% increase.
Following the publication, the market lowered its forecast for an interest rate hike by the Reserve Bank of New Zealand (RBNZ) this month to 50 basis points.
The RBNZ's last interest rate setting was in November, which saw the central bank raise interest rates by 75 basis points to 4.25%.
The central bank has increased its official cash rate 9 times in a row since October 2021 in the fight against inflation.
Looking at the currency reaction, the New Zealand dollar fell 0.3% to around 0.6420 following the data.
