Fortnightly Economic Update – 6 August 2026
June quarter labour market data showed spare capacity emerging, with the unemployment rate rising to 5.6% and hours worked falling, although employment increased as labour force participation strengthened.
While business and consumer confidence improved in July, late-month responses became more cautious as oil prices surged and geopolitical uncertainty intensified. Softer wage growth and elevated inflation continued to weigh on household spending.
Residential building consents continued to recover, reaching their highest annual level since September 2023, although higher construction costs and a subdued housing market remained challenges for the sector.
Globally, oil prices fell below US$80 a barrel as prospects of an interim deal on Strait of Hormuz shipping improved, while stronger activity across major economies provided some resilience despite ongoing geopolitical uncertainty.
Fortnightly Economic Update – 20 August 2026
Consumer price pressures eased in July, with lower fuel, electricity, rent and food prices helping to reduce inflation expectations and suggesting the recent oil price shock may prove temporary.
Household spending strengthened in July, with core retail spending rising 2.2%, although higher interest costs, subdued wage growth, job insecurity and flat house prices continued to constrain discretionary spending.
While manufacturing remained resilient, businesses continued to face higher fuel, freight and electricity costs, with services activity barely remaining in expansion and firms remaining cautious amid subdued demand.
Global risks increased as Brent crude rose above US$90 a barrel amid renewed disruption to Middle East oil supplies, pushing long-term bond yields higher and increasing risks of persistently higher inflation and tighter financial conditions.
© The Treasury - New Zealand