Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes have been reported today.
TERM DEPOSIT RATE CHANGES
Xceda Finance (ex-Asset Finance) raised all their TD rates, some with big rises, like their 9 month TD up +70 bps to 3.65% and their 18 month up +55 bps to 4.50%
GIANT NEW JOB INSURANCE SCHEME COMING
The Government is proposing a giant new income insurance scheme, similar to the existing ACC scheme. It will cover job losses due to redundancy and sickness/disability - at a cost to both employees and employers.
PASSED IN
The sales rate at Barfoot & Thompson's Auckland auctions dropped to 38% in the last week of January even though the numbers being offered at auction were up strongly.
UNEVEN START FOR 2022 RETAIL
Overall consumer spending in January through retail stores in Worldline’s payments network was up on the same time last year but dipped in the final week of the month due to Covid influences. Core retail sold $3.06 bln in the month (excluding Hospitality), a lift of +7.1% on the same month last year and up +12.8% from January 2020. But hospo was down -5.2% on 2021 and -8.7% on 2020.
VERY FULL EMPLOYMENT
Fewer people were added to our paid labour force in the December quarter than analysts were expecting. On a seasonally adjusted basis it rose by just +3000 people from September, although more than 101,000 more people were employed in December 2021 than December 2020. +30,600 more employees were added to public administration and healthcare in the year. Despite that, in the December 2021 quarter less hours were worked overall than in the December 2020 quarter. Labour productivity turned lower. But these are relatively minor quibbles. The jobless rate slipped from 3.4% to a record low 3.2%. The employment rate went up to 69.1%, the participation rate did too, to 71.4%. And our jobless rate is the fifth best in the OECD, while our employment rate is fourth best. More here.
VERY UNPRODUCTIVE EMPLOYMENT
The Quarterly Employment Survey has shown that gross earnings paid to all employees exceeded $2.5 bln in the quarter for the first time ever, a rise of almost +11% from the same quarter in 2020. But average hourly earnings rose 'only' +3.8% year-on-year, more for the private sector (+4.1%), and less for the public sector (+3.1%). Public sector pay is higher by +28% (public sector pay averages $1684/week on an FTE basis, whereas private sector pay averages $1318/week on the same basis), but these public employees are doing less and less overtime, while private sector employees are doing more. So, overall paid earnings are up +11% but overall hours worked decreased. This doing-less-for-more trend should worry public policy makers.
FOREIGN BUYERS SCARCE AGAIN
Stats NZ reported today that there were 41,460 home transfers in the December quarter, and of those 780 (or 1.9%) were to buyers who stated an overseas tax residency, including Australians (285 transfers), Americans (114 transfers), Brits (81) and Chinese (60). They point out that tax residency is not the same as nationality. For example, an overseas tax resident may be a NZ citizen living overseas. Alternatively, a NZ tax resident could be an overseas citizen who lives in New Zealand, or a company with overseas owners. On this basis, the tiny numbers recorded in Q3-2021 went down in Q4. Most of this activity occurred in Central Auckland, Christchurch, and Queenstown.
NEAR RECORD HIGHS
The overnight dairy auction was a good one, the second one in a row, and up +4.1% this time in USD terms (+6.4% in NZD terms). That is on top of the +4.6% rise two weeks ago. From this time last year, these prices are up +23%. Also see this.
EXHUBERANT
Analysts at both Westpac and ASB each raised their 2021/2022 milk price payout estimates, in the case of these two to $9.50/kg/MS and $9.25 respectively. Westpac didn't change its 2022/23 season estimate of $7.50 but ASB chimed in with an $8.80 forecast for the next season. They follow ANZ and NZX recently. Only BNZ and Rabobank are yet to update their estimates. Full details of all analysts estimates are here.
LOCAL PANDEMIC UPDATE
In NSW, there were 11,807 new community cases reported yesterday, similar the prior day, now with 119,265 active locally-acquired cases, and 27 daily deaths. There are now 2,623 in hospital there, off their high. In Victoria they reported 14,553 more new infections yesterday. There are now 73,886 active cases in that state - and there were 25 more deaths there. Queensland is reporting 9,630 new cases and 16 more deaths. In South Australia, new cases have slipped to 1266 yesterday. The ACT has 549 new cases, and Tasmania 699 new cases. There have been 1033 cases in the Northern Territory, a big jump. Overall in Australia, about 38,000 new cases have been reported so far although not all counts are in yet. In New Zealand, there were 54 cases stopped at the border, plus 142 new cases reported in the community.
GOLD UP
In early Asian trading, gold is at US$1801 and up +US$4 from this time yesterday.
EQUITIES RISE AGAIN
In New York, the S&P500 closed up +0.7% after a late rise. Tokyo has opened up another strong +1.2% and recall that Hong Kong and Shanghai are both closed for Chinese New Year. The ASX200 is up an even stronger +1.4% in early afternoon trade, which is being matched today the NZX50 which is also up +1.4% in late trade.
SWAPS HOLD
We don't have today's closing swap rates yet. They are likely unchanged. The 90 day bank bill rate is up another +2 bps at 1.17%. The Australian Govt ten year benchmark bond rate is up slightly at 1.93%. The China Govt 10yr is still at 2.72%. The New Zealand Govt 10 year bond rate is now at 2.59% (down -2 bps from this time yesterday) and still above the earlier RBNZ fix for that 10yr rate at 2.58% (down -1 bp). The US Govt ten year is now at 1.80% and back up +2 bps from this time yesterday.
NZ DOLLAR TURNS HIGHER
The Kiwi dollar is up +¾c from this time yesterday to 66.5 USc. Against the Aussie we are unchanged at 93.1 AUc. Against the euro we are up at 59 euro cents. That means the TWI-5 is now back up at 71.1.
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BITCOIN HOLDS
Bitcoin has changed little today and is now at US$38,670 which is up +0.9% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.6%.
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66 Comments
Interesting note about productivity
VERY UNPRODUCTIVE EMPLOYMENT
The Quarterly Employment Survey has shown that gross earnings paid to all employees exceeded $2.5 bln in the quarter for the first time ever, a rise of almost +11% from the same quarter in 2020. But average hourly earnings rose 'only' +3.8% year-on-year, more for the private sector (+4.1%), and less for the public sector (+3.1%). Public sector pay is higher by +28% (public sector pay averages $1684/week on an FTE basis, whereas private sector pay averages $1318/week on the same basis), but these public employees are doing less and less overtime, while private sector employees are doing more. So, overall paid earnings are up +11% but overall hours worked decreased. This doing-less-for-more trend should worry public policy makers.
I'm not really one to argue with Stats NZ but I thought hours worked as a measure of productivity was a pretty useless measure of actual productivity?
To be fair to StatsNZ, they report multifactor productivity, on an annual basis. We are the ones that relate total hours worked in the economy to real GDP output to track quarterly productivity - really labour productivity. Yes, real economists and statisticians have moved well away from that original simplified metric. But because the multifactor detail a) doesn't actually cover the whole economy (only the "measured sectors"), and b) is annual and well after the fact, we like to keep an eye on the quarterly detail to get a feeling of where things might be heading. If you spend more hours overall producing less outputs, it can't be a good thing.
Depends what you call 'outputs'.
Economics fails to understand what REAL work is, and indeed what REAL output is. Most of us don't 'work', and don't 'put anything out' - a journalist is one such example. But those od us who don't do REAL work, expect our parasitic social contribution to be exchangeable for REAL stuff; food, materials, energy.
Doesn't matter how much writing per hour you do, if there are no vegies on the supermarket shelves. You could speed up your word/hr count by 2, and by 2 again - still empty shelves.
GDP doesn't count the REAL either......
PDK, haven't you made the point before that all the "productivity" gains since industrialisation have really been achieved through burning oil, not making humans more productive? Doesn't that make all of us parasites on oil (the work of millions of years of living things now dead), even farmers, factory workers and builders?
The workers in my family are (or were) in IT, accounting, car sales, office management and real estate. Proud parasites, every one.
I get his point in a way.
There are people, resources (including food and energy), and ideas. You and I work in ideas, but we're dependent on the underlying resources and people managing them. Whether that's parasitical though, unless it's the fact ideas are driving the over-consumption of scarce resources and destruction of the host (e.g. anti-climate-science propaganda, oil lobby groups).
Am I missing something? Surely this quarter reflects another lockdown with prolonged period of wages paid but far less work possible with subsidy/resurgence payments happening and in some fields zero work possible? In the 13 week quarter we had 7 weeks of level 4 and proper level 3 in Auckland.
Why would it be a useless measure when you combine it with output (i.e. earnings)?
Productivity under Labour appears to have been cut to shreds, I thought it was bad under National, but Labours plans appear to be to tax the living hell out of anything productive to support more and more accommodation supplements being paid to property investors. And print even more money to hand to the already wealthy.
These idiots have gone over the deep end.
Dairying. Undeniably has shored up this nation’s earning power through thick and thin, year in, year out. Recall years ago, Robert Muldoon in opposition to the Kirk Labour government, slamming them in parliament for the dumping of cheese on the UK market. Minister Moyle’s response was a long one, explaining the earning power of NZ cheese globally. Muldoon’s riposte, sang out “Oh what a friend we have in cheeses.” Some things just change and stay the same.
What is surprising is that we don't get some lowering of cheese and milk prices for consumers in NZ in exchange for being there as taxpayers to support the farming sector in the hard times. Floods, droughts etc. Consumers might appreciate a bit of reciprocity, rather than seeing the same items being cheaper overseas than in NZ.
Very roughly, a family of 5 would go through 2l milk a day and 1kg cheese in a week pretty easily. Those 2 basics alone would be $460 cheaper per household per annum in Australia.
Throw petrol prices onto that, 91 is $2.70 in NZ and $1.70 ($NZ1.80) - 90c cheaper per litre. A family using 50 litres per week is $2340 better off in Aus.
So that's $2800 per year net for petrol, cheese and milk, or around $4k of gross income.
Is it all NZ sourced milk product?
Food in the States can be cheaper, but a lot of it's pretty shit, you have to go to a whole foods supermarket to get produce of a comparable quality to what is standard in NZ. From memory Aussie produce is in between NZ and the US for quality. Case in point, look what happened to Cadbury when they shifted production to straya'.
Jesus, you really have no idea of good quality food if you think NZ gets good supplies. lots of the stuff in our supermarket is very below average. i actualy struggle to shop here as 80% of the items in supermarket is hyper processed junk with high level of additives sugar palm oil etc
Your statement is all over the map. NZ makes some of the finest produce around. Not all produce at the supermarket is high quality. A lot of our standard items are of a higher quality than standard items in other countries. Food grown in a hothouse generally can't compete with heirloom market garden produce.
At the end of the day, there's price, then there's value, then there's quality. You can live cheaper many other places than NZ, but the quality varies.
I have been to the USA three times and I would say generally (obviously there are some really good fine dining places) middle of the road food offerings are pretty mediocre.
One thing I think NZ does better than many countries, including Aus, is restaurant and cafe food.
Where I live in 2 year old townhouses, most of us have to use heat pumps for much of summer to keep us cool. The townhouses are terraced,and well insulated, and very warm in winter. But overheat a lot in summer. Apparently this is becoming very common in new development in Auckland.
Labour pulling a Judith and trying to tank the next election.
Roll up for your daily covid booster. Don't worry if you don't get it, we upped your taxes so that you can get 80% of your wage to cover your income when you get made fired.
Vote Labour! we look after the working class.
I've just come up with the new slogan:
"Three shots to sit at home and do nothing because everything fun is cancelled again for the foreseeable future." Has a great ring to it, doesn't it?
There, I just saved the taxpayer compared to whatever puerile spin some well-connected ad agency is going to be paid to come up with the next insufferable radio jingle.
I'll still get my booster. But I'll do it after six months (i.e. what the manufacturer tested it for). Not sooner, just because a bunch of incompetent politicians are feeling the heat.
Join this bunch, lol. Based on the polls, even the ambling sheep that is the majority are slowly twigging that endless jabs may not be the answer.
I swear todays announcement was just the 2nd shot speech with "2nd dose" replaced by "Booster", "WHO"/"Science" replaced with "our team"/"Our health experts", and "Summer" replaced with "Omicron Outbreak"
What I would give for a top US/Euro analyst to dicsect her speeches like they do of their leaders.
Step 1: Open up Microsoft Word
Step 2: Load up last year's vaccine speech
Step 3: CTRL + F, and then 'find and replace' to suit
Step 4: Sit back and relax, knowing the media will lap it up and not question a single thing. Give yourself a pat on the back.
Job jobbed, jab jabbed.
"With no end in sight other than continuing announcements about future announcements. "
I turned off the news the second I heard "we will release the details later"
I simply do not understand how people let this slide. The media, voters, in fact everyone. No-one appears concerned (at least the media never ask any questions) that an announcement with no detail, no policy, no examples, and no answers, other than a "we will tell you later" is now considered a great outcome for democracy.
Is it any wonder, people are not paying for news anymore. The media should be ashamed. If I wanted to watch a bunch of sycophants praising an imaginary god I would join up to Destiny Church.
I've managed to go these 2+ years without paying any attention to NZ media or any kind of public COVID announcement. If my employer changes some rule about coming into the office (or not) they ping me. I googled how to get vaccinated and did that - about it. Apart from that I've enjoyed ignoring the whole thing and got on with life.
Public sector pay is higher by +28% (public sector pay averages $1684/week on an FTE basis, whereas private sector pay averages $1318/week on the same basis), but these public employees are doing less and less overtime, while private sector employees are doing more.
There's little incentive to venture out your own to start a business or work for a private company just to pay taxes to feed these mammoth public sector employees.
The government is the number one no choice employer in this country and it's a no brainer. Your taxes goes back into paying part of your own salary (effectively stealth tax reduction for you) and the job is secure as long as you sing the same song as everyone.
It's hard in the private sector, do yourselves a favour and make life easier for yourself, sign up at your nearest government agency today.
Little incentive to venture out and start your own business when you're just going to be carrying investment property anyway and that's a far easier way to get subsidised, largely tax-exempt and seemingly government-guaranteed income (whoops, "accidental capital gains").
If we really wanted to incentivise productive work we'd raise a LVT and balance it by reducing income tax, rewarding people for hard work rather than sitting around on their ass-ets.
Westpac NZ's Acting Chief Economist Michael Gordon says the strong labour market hasn't put as much pressure on wage growth as expected.
"Businesses’ labour shortages are well-documented by now; the key thing we’re watching is the extent to which this translates into upward pressure on wages. And in that respect the December quarter surveys were actually softer than we expected. The Labour Cost Index rose by 0.7% for the private sector, unchanged from the previous quarter," Gordon says.
"While the pace of wage growth has picked up over the last year, it hasn’t really gone beyond a catch-up after little or no wage growth in the wake of the Covid shock in 2020. Neither labour shortages nor demands for cost-of-living adjustments appear to have led to a widespread breakout in wage inflation yet." Link
Just came across a blast from the past when going through my emails. This an email from TSB from December 2014 when I was buying my first home. Times have changed:
Whether you’re buying a new home or refinancing an existing mortgage from another bank, sign up to a home loan with us before 12 December 2014, switch your income to us and get 5.70%p.a fixed for 2 years, plus you’ll get up to $2,000 Travel vouchers*
I am pleased to let you know we can lend you up to 80% of the property's value, and right now our interest rates are very competitive:
- 6 months fixed rate 5.80%p.a
- 1 year fixed rate 5.70%p.a
- 2 year fixed rate 5.70% p.a. * conditions apply
- 3 year fixed rate 6.20% p.a.
- 4 year fixed rate 6.40% p.a.
- 5 year fixed rate 6.50% p.a.
- Floating rate 6.74% p.a.
- Revolving Credit rate 6.74% p.a.
As I recall, we went with ANZ fixed for 2 years at 5.15%
This ACC income insurance scheme proposal is finding few fans. With Three Waters at least you could say people saw some merit even if they don't want it.
With the income insurance scheme some don't want more tax, some don't want another ACC and some don't want a welfare system that adds to the societal divide. It's like they have found a way to optimise the policy around there being something for everyone to dislike.
Recall Winston Peters stated between 2017 & 20, that he had to deal on a daily basis with a bunch of incompetents, or words to that effect. Nothing has changed obviously. Pity though he didn’t realise that before putting them into power. Could have sat on the sides & let National run a minority type government perhaps.
Matt Burgess: Why inflation looks here to stay - NZ Herald
https://www.nzherald.co.nz › business › matt-burgess-why...
The Reserve Bank's response to Covid has been nothing short of a catastrophe.
Agreed!
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