Wage and employment data out this week is expected to show a growing gap between skill shortages in New Zealand and the country's unemployment rate.
Statistics NZ's wage and quarterly employment data comes out tomorrow, and Westpac senior economist Felix Delbruck said he was not optimistic about the outcome for the June quarter.
"Wages have been rising at about the historical average rate - despite high unemployment - again suggesting that skill shortages exist in some occupations or regions, while workers languish unemployed elsewhere."
There was little sign wage pressures had accelerated during the past few quarters.
Annual wage inflation in the construction and real estate sectors as a whole remained constrained, although there had been outsized wage inflation in the Canterbury construction sector, he said.
On balance, the Westpac forecast was for June quarter wage growth to come in close to the average for a June quarter and be unchanged in annual terms.
As always, Westpac advised a focus on the labour cost index as the quarterly employment survey average wage measure was affected by changes in the job mix and job performance and did not give an indication of underlying movements in wage inflation, Mr Delbruck said.
On Thursday, the household labour force survey, the official measure of unemployment, will be released.
New Zealand's labour market has been sending conflicting signals in the past two years.
There has been a steady rise in job vacancies and surveyed skilled labour shortages, wage inflation inching up to levels that are not far from historical averages. At the same time, job growth and unemployment have stayed stubbornly soft.
Mr Delbruck said the indications were that the gap persisted in the latest June quarter.
New Zealand had strong March quarter GDP growth and a quarterly business survey showed a further increase in skill shortages.
But the Westpac McDermott Miller employment confidence survey showed households remaining very pessimistic about job opportunities, and businesses reporting only modest hiring, he said.
"The growing gap between unemployment and skill shortages makes us suspect that there has been an uplift in structural unemployment in recent years - possibly aggravated by the dislocation caused by the Canterbury earthquakes.
"In other words, it may have become harder to match people to job opportunities, resulting in rising wages for some while others remain unemployed."
Westpac expected unemployment to be 6.5% in the quarter and employment growth 0.3%.
Major surprises on the headline employment and unemployment figures were likely to prompt a market response, Mr Delbruck said.
"Given the tendency for the labour data to throw curve balls, we don't take much comfort from being close to market expectations."
