{"id":648191,"date":"2026-11-01T22:22:10","date_gmt":"2026-11-01T22:22:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/648191\/"},"modified":"2026-11-01T22:22:10","modified_gmt":"2026-11-01T22:22:10","slug":"unemployment-peak-will-the-last-big-piece-of-pre-election-economic-data-shift-the-dial","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/648191\/","title":{"rendered":"Unemployment peak: Will the last big piece of pre-election economic data shift the dial?"},"content":{"rendered":"However, the participation rate \u2013 the number of people exiting and entering the job market \u2013 was likely to be the deciding factor, he said.<\/p>\n
\u201cEmployment growth of around 0.5% would be more than enough to absorb the modest 0.3% rise in the working age population, and on its own would suggest a fall in the unemployment rate,\u201d Gordon said.<\/p>\n
\u201cBut … the participation rate has been choppy over recent quarters, and in the June quarter we saw an unusually large 0.3 point rise to 70.7%; we\u2019re assuming some payback this time with a more modest 0.1 point rise to 70.8%.\u201d<\/p>\n
Kiwibank economists were more optimistic, picking a fall in unemployment to 5.4%.<\/p>\n
\u201cWe expect the September quarter labour market data to reflect the rebound in confidence and drop in oil price we experienced over the September quarter,\u201d said economist Alexandra Turcu.<\/p>\n
But she also expected wage growth to have remained subdued, with private sector wages growing just 0.7% compared with the June quarter.<\/p>\n
\u201cThe point being, it\u2019s a bit too early to celebrate a labour market tightening,\u201d she said.<\/p>\n
\u201cThis is just a small move and not sufficient to move the needle on the economy.\u201d<\/p>\n
The unevenness in the labour market was likely to persist, with older age groups snapping up more jobs and leaving fewer for younger workers, she said.<\/p>\n
\u201cUnemployment amongst under-25s is expected to remain painfully high.\u201d<\/p>\n
While ANZ also expects to see numbers showing job creation and employment growth, it is picking a rise in the participation rate, which will see unemployment flat at 5.6%.<\/p>\n
Economist Matthew Galt is picking annual growth in the Labour Cost Index (LCI) to tick 0.1 point higher to an annual rate of 2.1%.<\/p>\n
The LCI measures the cost of an hour\u2019s work for employers.<\/p>\n
The Quarterly Employment Survey (QES) average hourly earnings provided a better measure of what workers actually receive, Galt said.<\/p>\n
At best it would only match the annual pace of consumers price index (CPI) inflation at 3.7%, he said.<\/p>\n
He expected private sector average hourly earnings to rise just 3.6% and total economy average hourly earnings growth (private and public sector) to be slightly lower.<\/p>\n
\u201cOverall, the labour market data is expected to show considerable spare capacity, with enough strength in employment growth to prevent a further rise in the unemployment rate,\u201d he said.<\/p>\n
For the Reserve Bank of New Zealand (RBNZ), anything more than a slight tick up in wage inflation would cause \u201cconsternation\u201d.<\/p>\n
\u201cWhile contained wage growth is not good news for households facing acute cost-of-living pressures, it does mean that wage-price spiral risks are mitigated.\u201d<\/p>\n
Given inflation pressures from several other directions \u2013 such as fuel prices, a falling kiwi dollar, and rising administered prices (like rates) \u2013 the RBNZ was relying on ongoing labour market slack to prevent inflation becoming embedded in the economy, he said.<\/p>\n
ASB economist Wesley Tanuvasa noted that higher default KiwiSaver contributions and strong labour supply would likely contain wage pressures.<\/p>\n
\u201cThis keeps the risk of a wage-price spiral low,\u201d he said.<\/p>\n
\u201cThere is contention on how much disinflationary pressure the labour market is imparting on the NZ economy. We suspect the disinflation may not be as much as the RBNZ assumes.\u201d<\/p>\n
That was one reason ASB was less comfortable with the medium-term inflation outlook, he said.<\/p>\n
ASB expects a 25 basis point hike in December and a 3.5% OCR peak by March 2027.<\/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
Stay ahead with the latest market moves, corporate updates, and economic insights by subscribing to our Business newsletter<\/a> \u2013 your essential weekly round-up of all the business news you need.<\/p>\n","protected":false},"excerpt":{"rendered":"However, the participation rate \u2013 the number of people exiting and entering the job market \u2013 was likely…\n","protected":false},"author":2,"featured_media":648192,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[8834,138,124,3105,52156,10668,13488,219,8456,8454,6721,685,225,111,139,69,1118,13028,9615,151635,19257,5659,5258,88,223,1961,241,21734,1680,1533],"class_list":["post-648191","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-big","tag-business","tag-could","tag-data","tag-dial","tag-economic","tag-economists","tag-economy","tag-fresh","tag-including","tag-labour","tag-last","tag-market","tag-new-zealand","tag-newzealand","tag-nz","tag-of","tag-peak","tag-piece","tag-preelection","tag-rate","tag-say","tag-shift","tag-surprise","tag-the","tag-this","tag-unemployment","tag-upside","tag-wednesday","tag-will"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/648191","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=648191"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/648191\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/648192"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=648191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=648191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=648191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}