Stronger labour market will not sway RBNZ from OCR cut

There were two key uptakes from labour market data released this week that have important implications for what will be going through the Reserve Bank’s mind when it reassesses the Official Cash Rate (OCR) next month.  Firstly, the sharp lift in employment in the March quarter highlighted the fact that economic growth in the New Zealand economy continues to perform well.  Secondly, wage growth remains subdued, as a result of a significant lift in the size of the labour force (from elevated net migration) and low inflation expectations.