{"id":258661,"date":"2025-11-03T01:10:16","date_gmt":"2025-11-03T01:10:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/258661\/"},"modified":"2025-11-03T01:10:16","modified_gmt":"2025-11-03T01:10:16","slug":"unemployment-preview-new-stats-to-reveal-job-market-is-still-weak","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/258661\/","title":{"rendered":"Unemployment preview: New stats to reveal job market is still weak"},"content":{"rendered":"\u201cThe labour market tends to lag the economic cycle.\u201d<\/p>\n
Employment and demand for labour looked to be edging higher from a low level, he said.<\/p>\n
\u201cThere are hints that this may be changing market dynamics as growth in labour supply is also slow.\u201d<\/p>\n
Westpac senior economist Michael Gordon said he expected falling youth participation in the labour market would continue to flatter the unemployment rate.<\/p>\n
The participation rate \u2013 those actively engaged in working or looking for work \u2013 has dropped sharply in the past year as increasing numbers of young people have returned to study.<\/p>\n
The Monthly Employment Indicators had shown that youth employment remains the biggest point of weakness for the labour market, he said.<\/p>\n
That suggested a further drop in participation among young people was likely as they chose to stay in school for longer rather than entering the ranks of the unemployed.<\/p>\n
\u201cWith jobs growth being insufficient to absorb the new entrants into the workforce, that implies a rise in the unemployment rate and\/or a fall in participation,\u201d Gordon said.<\/p>\n
\u201cOur forecast splits the difference \u2013 we expect a tick up in the unemployment rate from 5.2% to 5.3%, and a drop in the participation rate from 70.5% to 70.4%.\u201d<\/p>\n
Broadly, the ongoing slack in the labour market was expected to keep downward pressure on wages.<\/p>\n
ANZ senior economist Miles Workman said: \u201cGiven the negotiating power is currently concentrated on the employer side of the table, we expect annual wage growth to slow.<\/p>\n
\u201cWage inflation as measured by the private sector Labour Cost Index (including overtime) is expected to slow from 2.3% to 2.2%, and growth in private sector average hourly earnings (ordinary time) is expected to slow from 4.6% to 4.3%,\u201d he said.<\/p>\n
Hours paid and hours worked have contracted more sharply than employment in recent quarters.<\/p>\n
That suggested firms were holding on to staff despite subdued demand for goods and services.<\/p>\n
\u201cIf the economic recovery is delayed for too long, firms may lack the balance sheet capacity to continue hoarding labour in anticipation of it,\u201d Workman said.<\/p>\n
\u201cThat means the unemployment rate could rise more than we or the RBNZ are forecasting.\u201d<\/p>\n
The Reserve Bank (RBNZ) had mitigated this risk with its dovish pivot in August and outsized Official Cash Rate cut in October, he said.<\/p>\n
\u201cBut long and variable lags mean we\u2019re not out of the woods yet.\u201d<\/p>\n
ASB took a more optimistic view, picking topline unemployment to hold steady at 5.2%.<\/p>\n
\u201cThe worst is behind us, but we don\u2019t expect to see a meaningful lift in employment until 2026,\u201d said senior economist Mark Smith.<\/p>\n
The still-heightened competition for jobs would act to cap wage increases, with employees focusing on keeping their jobs rather than securing chunky wage increases, he said.<\/p>\n
\u201cSlowing growth in labour costs should ensure that core inflation will ease towards the 1-3% inflation target midpoint.\u201d<\/p>\n
ASB remains of the view that a 25 basis point cut will be delivered in November as the RBNZ seeks to underwrite the recovery.<\/p>\n
\u201cWe currently expect 2.25% to be the low point in the OCR for this cycle, but we also see the risk of the OCR going lower if data suggest the economic recovery is struggling to get traction,\u201d Smith said.<\/p>\n
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.<\/p>\n
Listen and subscribe to the Today in Business<\/a> podcast \u2013 the top headlines from the NZ Herald business team summarised and delivered by an artificial intelligence (AI) voice as an easily digestible recap.<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cThe labour market tends to lag the economic cycle.\u201d Employment and demand for labour looked to be edging…\n","protected":false},"author":2,"featured_media":258662,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,15855,164,152318,1460,4693,4694,9051,34827,3127,3019,22793,43157,37284,23180,13807,152319,319,4847,152317],"class_list":["post-258661","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economists","tag-economy","tag-expect","tag-is","tag-job","tag-market","tag-months","tag-most","tag-new","tag-preview","tag-reveal","tag-september","tag-stats","tag-still","tag-three","tag-ticked","tag-to","tag-unemployment","tag-weak"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/258661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=258661"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/258661\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/258662"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=258661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=258661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=258661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}