Employment is expected to have fallen marginally in the three months ended March with wage inflation forecast to remain subdued.
Wage data will be released tomorrow by Statistics NewZealand, the Household Labour Force Survey on Thursday.
Westpac senior economist Felix Delbruck said December's labour market report gave mixed signals. The unemployment rate fell for the first time in three quarters but growth in jobs and hours worked was weak.
Overall, the labour market still looked soft and he expected only a modest decline in the unemployment rate in March to 6.2% from 6.3% in December.
"Certainly, that is the message coming from business and consumer surveys, as well as our expectation for still fairly modest economic growth.
"With unemployment still well above average, we expect wage growth to remain subdued as well."
As always there were risks on either side, he said.
Given the small changes being talked about, rounding could easily keep the unemployment rate at 6.3%.
However, if it was the genuine start of a downward trend in unemployment, the fall could be steeper, as happened after the recessions in the early 1990s and late 1990s.
Westpac was forecasting employment growth of 0.5% and a moderate bounce in hours worked, Mr Delbruck said.
An unemployment rate of 6.2% was still well above average and he expected subdued wage growth.
None of the wage inflation measures was seasonally adjusted.
The measure of most interest was the Labour Cost Index which, unlike the Quarterly Employment Survey's average wage, was not affected by changes in the job mix or promotions.
