NZ Labour Market Preview: Forecasts from four major banks, back to work

New Zealand is set to report its employment figures for the third quarter on Tuesday, November 1 at 21:45 GMT and as we get closer to the release time, here are forecasts from economists and researchers at four major banks regarding the upcoming labour market data.

The unemployment rate is expected to fall a tick to 3.2%, driven by an expected 0.5% quarter-on-quarter gain in employment. Private wages including overtime are expected at 1.2% QoQ vs. 1.3% in Q2.

Westpac

“We expect a solid 0.6% rise in employment for the quarter and a small dip in the unemployment rate back to its record low of 3.2%. We also expect a 1% rise in the Labour Cost Index, lifting the annual growth rate to a 14-year high of 3.6%.”

ANZ

“We’ve pencilled in a 0.5% QoQ (0.3% YoY) increase in employment. That translates into unemployment easing 0.2ppts to 3.1%, assuming the participation rate lifts 0.1ppts to 70.9%. Data may not shift the dial for the November MPS (where a 75 bps hike is widely expected). But a stronger-than-expected set of data could firm up expectations for another 75 bps hike in February.”

NAB

“We think Wednesday’s Q3 labour market reports will show the unemployment rate pressing down to a record low 3.1%, lower than the 3.3% the RBNZ predicted in its August MPS. But then the RBNZ also expected a quarterly 1.2% lift in the private-sector LCI, which is north of the 1.0% we expect.”

Citibank

“NZ Q3 Labor Force and Wages: Citi employment change forecast; 0.8%, Previous; 0.0%; Citi unemployment rate forecast; 3.3%, Previous; 3.3%; Citi private sector wages forecast; 1.6%, Previous; 1.3%. Despite the return of jobs, we do not expect the unemployment rate to fall from 3.3%. Even so, with a tight labor market, we expect another strong increase in private-sector wage costs.”