Unemployment has jumped to 4.2%, its highest level in almost five years, while the labour market has made a 0.1% gain in jobs, the latter against expectations.
However, analysts are forecasting employment levels have peaked and will now begin trending down while unemployment totals will have up to 24,000 people out of a job during the next 12-months as the recessions bites harder.
Data from Statistics New Zealand yesterday revealed in its household labour force survey the unemployment rate for the quarter to September rose from 3.9% to 4.3% while employment growth rose 0.1% against market expectations of -0.6%.
In September there were 94,000 people unemployed, 16,000 more than a year earlier, while the number of people employed increased by 3,000 during the quarter to September.
BNZ senior economist Stephen Toplis said despite the 0.1% employment rise, the real message was that it had peaked and was "only going to go one way from here".
"We reckon that in a year's time the household labour force survey will reveal that 24,000 people will have lost their jobs - a 1% decline. Accordingly, the unemployment rate will rise to 5.4%," Mr Toplis said.
ASB economist Jane Turner said although yesterday's data was not as weak as expected, the labour market was a lagging economic variable and a decline in employment growth "is somewhat inevitable" given the recession this year.
"The deterioration in global financial markets over October and the uncertainty which prevailed is likely to drive a fall in unemployment during the fourth quarter," Ms Turner said.
The difficult financial climate and strained household budgets would likely put more pressure on job hunters to keep looking for work, longer, she said.
Ms Turner said unemployment in a year's time could be at 7.6%, but noting estimates of employment losses could be "conservative".
If jobs created in construction and property and business services during the housing boom were lost, those sectors alone amounted to 90,000 jobs, she said.
