TD Securities analysts are expecting that the New Zealand’s jobs growth is likely to soften, but due to a lack of suitable labour rather than a collapse in activity.

“As the labour market is tight we also expect a pick up in wages growth (0.6% vs mkt 0.5% q/q). The update feeds into the RBNZ's Monetary Policy Statement, which is ‘live’ despite being the first with a Board. The RBNZ expects a drop in the u-rate to 4.2% (TD 4.2%) well within the estimates of maximum sustainable employment. We look for the 0.4% q/q rise in jobs to lower the u-rate with a pip lower participation rate of 70.8% (mkt 70.9%).”