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One glance at the freshly released New Zealand jobs report might lead most forex traders to think that another RBNZ interest rate cut is a done deal already. After all, the employment change reading showed a mere 0.7% uptick in hiring for the first quarter, lower than the projected 0.8% gain and the previous period’s 1.2% increase. Meanwhile, the jobless rate came in at 5.8% versus the estimated 5.5% figure for Q1 2015.

new zealand jobs constructionLooking at the underlying data, however, reveals that New Zealand’s labor situation is not as dismal as the headline figures would have you believe. The participation rate actually jumped from 69.4% in the previous quarter to an all-time high of 69.6%, as approximately 19,000 folks returned to the labor force to resume their job hunt. This explains the lack of improvement in the unemployment rate, as the 16,000 increase in hiring was spread out over a larger labor force, and reflects a pickup in confidence in the job market.

Breaking the hiring gains down by sector shows that the construction industry contributed the most, as employment grew by 23,000 and accounted for almost a third of the total jobs growth in the entire nation. A record increase in immigration has also been responsible for filling in most of the positions and job opportunities available during the first quarter. Full-time employment also accelerated during the period, accounting for roughly 11,000 positions, while part-time hiring was mostly flat.

When it comes to wages, salary growth was a tad weaker than expected. The labor cost index indicated a 0.3% uptick in ordinary time wages for Q1, lower than the projected 0.4% increase and the previous period’s 0.5% gain. With that, wage inflation remains safely above New Zealand’s annual CPI of 0.1%, ensuring that consumer spending could stay supported.

Some forex market analysts actually pared their RBNZ rate cut expectations after the jobs release, as the headline figures may have come in weaker than expected but not bad enough to warrant easing. After all, RBNZ Governor Wheeler clarified that they could lower interest rates if the slowdown in inflation starts dragging wages down. For JPMorgan Chase & Co. senior economist Ben Jarman, it’s still reasonable to expect that the RBNZ will just keep monetary policy on hold for the rest of the year.

Nonetheless, many still believe that the RBNZ will not hesitate to pull the trigger in their next policy statement, with hotshot experts over at Deutsche Bank AG seeing a stronger case for a rate cut thanks to the bleak jobs report. Analysts at ASB Bank Ltd. are even predicting two rate cuts this year, one in September and another in October, as the downbeat jobs situation could spur a prolonged economic downturn.