New Zealand Q3 jobs report is due at 2145 GMT
I posted previews here yesterday: Stay tuned for Wednesday's NZ employment report - preview
More now.
Via ANZ:
Signals on labour demand have become a little more mixed of late, though we still expect Q3 figures to be consistent with overall labour market strength.
- On balance with employment having unexpectedly fallen in Q2, a degree of rebound is likely.
- We have pencilled in a 0.8% q/q lift (2.5% y/y), with hours worked assumed to more or less follow suit.
- The labour force is likely to have expanded at a similar pace. With labour demand and supply growth matched in the quarter, we see the unemployment rate holding steady at 4.8%, perhaps with downside risk.
The Government's equal pay settlement for care and support workers will boost wage inflation figures. Our preferred wage measure, the private sector Labour Cost Index, is expected to rise 0.8% q/q, which would see annual wage inflation lift to 2.0% y/y, the highest since 2012. That's roughly double its typical quarterly rise but has a strong one-off element.
- We have become a little more circumspect on the near-term growth outlook But there are some additional moving parts right now that make the picture a little murkier.
- With the RBNZ firmly on hold and a strong one-off element to the quarterly wage lift, we do not see next week's labour data as having strong implications for the RBNZ's current deliberations. But the labour market is likely to become a driving factor influencing the path for inflation as 2018 unfolds.
BNZ:
Even running into a very tight-looking election, NZ businesses were reporting a robust view around hiring. But how this (ever) translates into the quarterly estimates of the Household Labour Force Survey (HLFS) is always a bit of a lottery. We say this with the Q2 HLFS having registered a 0.2% fall in employment, yet a further moderation in the jobless rate, to 4.8%, as the participation rate came down from its all-time high of 70.6% in Q2, to 70.0%.
- For Q3 we propose a 0.7% rebound in the HLFS's employment and a 0.1 fall in its unemployment rate, to 4.7%. The market expects a 0.7% gain in jobs, but a steady unemployment rate of 4.8%. For the record, the RBNZ, in its August Monetary Policy Statement, anticipated a Q3 unemployment rate of 4.7% (on its way to 4.5% right through calendar 2018).
Regards wages and salaries, we anticipate the Q3 Labour Cost Index to rise 0.7%.
- This would lift its annual inflation to 1.9%, from 1.6%. Just bear in mind that this brings in the care-workers' pay-equity settlement with the government, which meant for some hefty pay increases in many cases.
- This, by the way, would also suggest the unadjusted LCI measure will be running noticeably above 3% per annum in Q3, as a truer sense of where nominal wage inflation is at. It's not clear that the market has made allowance for the pay-equity settlement, as it expects the Q3 LCI to increase a steady 0.5% in the quarter.
