{"id":843511,"date":"2026-08-03T02:06:18","date_gmt":"2026-08-03T02:06:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/843511\/"},"modified":"2026-08-03T02:06:18","modified_gmt":"2026-08-03T02:06:18","slug":"jobless-on-the-rise-unemployment-rate-expected-to-land-higher-this-week","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/843511\/","title":{"rendered":"Jobless on the rise: Unemployment rate expected to land higher this week"},"content":{"rendered":"
ANZ senior economist Miles Workman.<\/p>\n
\u201cFor the RBNZ, this suggests that the labour market is unlikely to become a renewed source of accelerating CPI inflation pressures any time soon.\u201d<\/p>\n
The full labour market impact of the Middle East conflict would take time to appear in the data, ASB economist Wesley Tanuvasa said.<\/p>\n
\u201cThe size and persistence of the Middle East cost shock remain uncertain, particularly given how fluid US-Iran developments are right now.<\/p>\n
\u201cNext week\u2019s employment figures may show some improvement, but the overall story is that the labour market remains soft, and Kiwi households have done it tough over the last economic cycle.\u201d<\/p>\n
Modest labour cost growth would help calm any RBNZ fears of a wage-price spiral, he said.<\/p>\n
\u201cBut there is still inflationary pressure elsewhere.\u201d<\/p>\n
Westpac senior economist Michael Gordon said the labour market could still be characterised as a \u201clow-fire, low-hire\u201d environment.<\/p>\n
\u201cFirms have looked to hold on to workers to the extent that they can, but that means they haven\u2019t returned to hiring mode even as conditions have started to improve.\u201d<\/p>\n
Job vacancies had picked up from their lows, but they remained well below pre-Covid levels.<\/p>\n
Meanwhile, those out of work were finding it increasingly difficult, and long-term unemployment had become a much greater issue than in previous cycles, he said.<\/p>\n
Again, the upside (if there was one) was the disinflationary effect of a weak labour market at a time when the Reserve Bank was battling to keep inflation at bay.<\/p>\n
\u201cWhile cost-of-living pressures have reared up again as a concern for households, the existing degree of slack in the labour market is a crucial difference between now and the surge in wage growth that we saw in the post-Covid years,\u201d Gordon said.<\/p>\n
\u201cWe expect a 0.6% rise in the Labour Cost Index (LCI) for the June quarter, keeping annual growth just below 2%.\u201d<\/p>\n
Public sector pay increases were probably running behind the private sector, with the impact of past collective agreements dropping out of the annual calculations.<\/p>\n
The year to date had been \u201cturbulent and frustrating\u201d, Kiwibank economist Alexandra Turcu said.<\/p>\n
\u201cLabour market strength will take time and requires business sentiment to improve.<\/p>\n
\u201cSo far, we see that business confidence took a hit over the March quarter and was starting to recover in the June quarter. That bodes well for the rest of the year, but could easily be derailed by the Middle East conflict re-escalating.\u201d<\/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