2 May 2011

Slight fall in unemployment expected in latest data

7:02 am on 2 May 2011

Economists are expecting data released this week to show unemployment has fallen slightly in recent months, as the economy continued its recovery.

But with many firms still facing tough times, and a lot of slack left in the labour market, workers pay packets are unlikely to have grown much.

The Labour Cost Index and Quarterly Employment Survey for the three months to March will be released on Tuesday, and the Household Labour Force Survey on Thursday.

ASB economist Jane Turner says the unemployment rate remains elevated at 6.8% and the pick up in wage growth remains subdued.

She expects the latest data to show a modest easing of the unemployment rate to 6.7%, but both the unemployment and wage rates will need to improve before the recovery becomes more sustainable.

Because Statistics New Zealand has not been able to survey in Christchurch during the first quarter, she says, it makes it more difficult to interpret the earthquake's impact on economic activity.