New Zealand: Labour market provided surprises in both directions – Westpac

The March quarter surveys provided a mixed picture of the strength of the labour market, ahead of the impact of the Covid-19 outbreak, per Westpac Institutional Bank.

Key quotes

“The unemployment rate rose to 4.2%, a smaller increase than expected, and employment and participation both rose.” 

“The measures of wage growth were mixed. The Labour Cost Index (LCI) rose by just 0.3% for the quarter while QES average hourly earnings rose by 1.4%, largely a seasonal increase which saw annual growth held steady at 3.6%.” 

“Our current forecast is for the unemployment rate to peak at 9.5% in the June quarter. However, there’s a lot of uncertainty as to how this will play out, and we’ll be closely watching how the jobs market progresses.”