Demand for workers ‘red hot’

WELLINGTON: The red hot labour market is set to deliver another record low unemployment rate and the strongest lift in wages in more than a decade.

Official numbers for the three months ended June are due this week, and are expected to confirm what the surveys and anecdotes have been indicating for months — workers are hard to find, which is forcing a lift in wages to attract or hold on to staff.

Estimates for the jobless rate range between 2.8% and 3.1% from the current record low of 3.2%, one measure of wages rising at an annual rate of more than 5.5%.

‘‘The demand for workers remains red hot, and with fewer Omicron disruptions in the quarter, we expect to see a lift in the number of workers,’’ Westpac acting chief economist Michael Gordon said.

Unemployment is defined as those actively seeking work, while underutilisation includes those wanting to work more hours or who could work but are not actively seeking a job.

The economy is expected to have added as many as 10,000 jobs during the quarter, backing the view that the tightness in the labour market is not the shortage of jobs but of workers.

Analysts will be looking at some of the lesser numbers for a better steer on the market, including the number of hours worked and jobs filled, which will show the disruption from illness and other absenteeism.

Recent surveys have businesses reporting the shortage of labour is their No 1 problem, while firms have shown their need for labour with continued positive employment intentions.

The scarcity of workers is also expected to be reflected by solid growth in wages during the quarter as businesses offer top dollars to lure or retain staff.

ASB senior economist Mark Smith said some of the chunkiest numbers to be released would be for wages, which had probably risen at the highest level in a decade but still lagged inflation of 7.3%. — RNZ