BNZ reports early improvements in the jobs market, signalling a drop in unemployment by mid-year.
BNZ head of research, Stephen Toplis, noted that monthly employment indicators point to modest growth, with Stats NZ’s Q4 household labour force survey also anticipated to reflect slight gains.
BNZ’s employment report, compiled with jobs platform SEEK, indicated job ads rose about 7% from a year earlier.
“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 of labour.”
He anticipates the catch-up occurring within the next 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.”
Since the start of January, the Kiwi dollar has emerged as the top-performing major currency against the US dollar.
Westpac’s head of New Zealand strategy, Imre Speizer, noted that US dollar weakness explains only part of the NZ dollar’s recent gains.
The recession curbed investor interest in the NZ dollar, but Speizer said the economy hit bottom in October and has steadily improved since.
“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.