Macroeconomic weekly round up: NZ GDP and the curious case of UK's wage growth figures
Jason Walls breaks down the week's biggest news in macroeconomics on NBR Radio, and on demand on MyNBR Radio.
New Zealand’s economy is showing more similarities to the Australian economy, as second quarter GDP growth slows due to weak global commodity prices.
Yesterday it was revealed New Zealand’s GDP grew by just 0.4% as lower dairy prices weighed on the economy.
NBR reporter Jason Walls says economic growth of 2% for the whole year is now looking even more likely, with the chance it will slip below the 2% mark a realistic possibility.
Both business and consumer confidence has fallen and there is an increasing worry about the risks of an El Nino and a drought this summer.
“This would be ever more bad news for the economy,” Mr Walls says.
The weak GDP figure follows the Reserve Bank of New Zealand cutting interest rates from 3%, down to 2.75%.
Mr Walls says more cuts are on the way, and there are now more analysts picking the interest rate will drop to as low as 2%.
Looking overseas, the global issue of inflation – or lack of – continues to plague the UK, with CPI data out this week revealing zero growth in August.
That’s down from just 0.1% growth in July.
“But on the flip side, we’ve seen this week wage growth is rising at the fastest rate since 2009, with average salaries up by just under 3%,” Mr Walls says.
He adds it’s unusual to see zero inflation but such large wage growth.
“As many employers tie wage increases to inflation, it’s odd to see wages increase when inflation is flat.”
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NBR Radio
Fri, 18 Sep 2015
Fri, 18 Sep 2015
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Macroeconomic weekly round up: NZ GDP and the curious case of UK's wage growth figures
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