An update from Stats NZ on Wednesday will show workers are in short supply, banks say.
Unemployment and wage data to be released on Wednesday could put more pressure on the Reserve Bank to raise interest rates in the coming months, economists say.
The Reserve Bank forecast in August that official unemployment would hold steady at 3.3% in the three months to the end of September before climbing to 4.5% by the end of next year.
But some private sector economists believe unemployment may have fallen to a new modern low, which could add pressure on the Reserve Bank to raise interest rates higher than it had. intended.
Stats NZ will release wage data at the same time as it updates its employment statistics.
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* Stats NZ says it doesn’t have the money to report inflation more frequently
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Any wage surprises could be equally influential in helping chart the course for interest rates, with economists watching for any convincing signs that inflation could lead to an emerging wage-price spiral.
ANZ expects Stats NZ to report that official unemployment was 3.1% in the three months to the end of September, which would be the lowest rate since it began collecting comparable statistics in 1986 and likely well before.
However, he said the “volatility” of unemployment data made the number difficult to predict.
The official unemployment rate is based on a survey by Stats NZ. To count, people must have actively looked for work in the previous four weeks.
ASB and Westpac both predict that Stats NZ will report that unemployment has fallen to 3.2%, matching its rate in the first half of this year, but ASB warned that a correct choice would be “more a case of luck than good judgement”.
Westpac’s acting chief economist Michael Gordon said demand for workers remained “red hot”.
“Fiscal data suggests that job growth has even regained some momentum in recent months.”
ANZ already assumes that the Reserve Bank will raise the official exchange rate by 75 basis points to 4.25% next month.
But he said stronger-than-expected jobs and payroll data could bolster his own expectations of another 75 basis point hike in February, taking the OCR to 5%.
On the other hand, if the data were weaker than expected, the Reserve Bank likely wouldn’t take it into account “given all the other evidence that the labor market remains extremely tight,” she said. .
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Social Development Minister Carmel Sepuloni said the Social Development Ministry must prepare for an anticipated rise in unemployment.
Stats NZ reports a variety of different measures of wage growth when it releases its quarterly labor market statistics.
ANZ expects it will report that productivity-adjusted labor costs in the private sector rose 3.9% from the same quarter last year, while the SBA expects which they increase by 4%.
The Adjusted Labor Cost Index (ICM) is generally regarded as Stats NZ’s best estimate of wage pressures in the economy.
Indeed, it attempts to take into account not only wage increases, but also changes in the composition and skill level of the workforce over time.
But ANZ chief economist Sharon Zollner questioned whether she might be underreporting increases in wage costs because she doesn’t take into account the phenomenon of ‘job title inflation’, according to which those promoted to higher positions may not be more productive.
ANZ expects average hourly wages in the private sector to have risen 8.2% over the year, “comfortably ahead” of the inflation rate of 7.2%.
But, at least so far, most other measures of wage growth, including the unadjusted MCI which was last measured at the annual rate of 5.1%, have consistently shown wage growth. wages below inflation.