A local economist says the country’s job market is looking “really strong” thanks to increased migration and continued job creation.
It comes as fresh unemployment data is expected from Stats NZ later today outlining the state of the country’s job market.
Greg Smith from Devon Funds told Breakfast he is optimistic about the report and believes things are looking good.
“I think the job market’s stilling looking really strong.”
He said this stability has likely come from migration, which had “reduced supply pressures”.
The report will likely be around 3.4% unemployment, Smith said - describing the labour market as “tight”.
He also said there would likely be no signs of a labour recession, with wage growth at around 4.1% - in line with the cost of living.
“Obviously, there is a scarcity of labour, but migration is helping there.”
However, there is “a little bit of nervousness around businesses generally exists”.
“If you look at recent reads on sentiment, businesses are a bit unsure about the outlook.
“Like individuals, they’re also dealing with higher borrowing costs, higher interest rates; some have been able to deal with that a little bit better.
“But businesses are generally okay.”
The Reserve Bank is also set to release a report on the country’s “financial resilience”.
Smith said this report will be seen as a “health check” on the economy.
He expects to see interest rates jump from 4.5% to 6% by the end of the year but says the newest report will be more about “reassurance”.
“We could be through the worst of it,” Smith said - with inflation coming down and a strong jobs market.
“Particularly with respect to those interest rate increases, it could well be that the reserve bank is close to being done with those.”
Smith advises Kiwis struggling with the current state of the economy to “speak to your bank” and work out schemes to help.
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