Source: Radio New Zealand
BNZ’s employment report with jobs platform SEEK showed job ads up around 7 percent from a year ago. 123RF
The jobs market is showing early signs of improvement, according to BNZ, which it said should lead to lower unemployment by the middle of the year.
The latest unemployment statistics are due next week, but the most recent data from the September quarter showed the jobless rate at 5.3 percent – the highest level since late 2016.
BNZ head of research Stephen Toplis said monthly employment indicators showed modest growth, and Stats NZ’s fourth-quarter household labour force survey was also expected to show slight growth.
BNZ’s own employment report with jobs platform SEEK showed job ads up around 7 percent from a year ago.
“It will take a while before the unemployment rate drops, because it’s one thing seeing growth and people being hired, but it’s got to catch up with growth in the supply in labour.”
He expected the catch-up to happen “in a quarter or two”.
“Certainly mid-year, but there’s a difference between better and good,” Toplis said. “For a lot of people who are currently facing unemployment, it’s not clear that the jobs that will be created are going to be consistent with the skillset that they’ve got.”
He also noted there were many households already in work, but looking for more.
“We know that the household sector is struggling, so if you can’t get pay increases you work more hours, so there’s an awful lot of people.”
Economic recovery and weak US currency help Kiwi dollar
The Kiwi dollar is often called the “flightless bird” in financial markets, but its recent performance has been anything but.
Since the start of the year the dollar has flexed its wings, becoming the best-performing major currency against the US dollar.
Westpac head of New Zealand strategy Imre Speizer said the weakness of the US dollar was only half the story behind the NZ dollar’s recent strength.
The recession dampened investor appetite for the NZ dollar, but he said the economy bottomed in October and has improved steadily since then.
“The market has changed its tune on this, and it’s recognised the economic recovery is well in motion, and is likely to persist for the rest of the year,” Speizer said.
“It’s now one of the choice destinations for going long in currencies.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
