7 Feb 2012

Sluggish labour market expected this year

6:54 am on 7 February 2012

ANZ senior economist Mark Smith is predicting sluggish growth in employment and wages this year.

A clearer picture of the health of the labour market should emerge this week, with the release of key labour market statistics.

The Labour Cost Index and Quarterly Employment Survey, which measure wage growth, are out on Tuesday, while the Household Labour Force Survey, which measures employment, is released on Thursday.

Wages and salaries are expected to remain at similar levels to the September quarter, with modest growth at about 0.5%, due to a weakening labour market.

Mr Smith expects the unemployment rate to remain well above 6% for the rest of 2012 and companies will be reluctant to hire.