Economists are forecasting a 4.8% rate of unemployment for the three months ended June and for the employment rate to lift by 0.7% in the quarter.
The participation rate is forecast to rise again to 70.7%.
Otago Chamber of Commerce chief executive Dougal McGowan said everything was pointing to further tightening in the labour market and employers struggling to find the staff they needed.
Annual employment growth was picked to grow at 3.9%, a large rise when participation was already high.
"We have to start thinking about where is the peak and how long can this trend continue?"
The hours worked were also increasing, indicating part-time workers were getting more hours. The June quarter was usually the quietest one for employment, as it was regarded as a shoulder season for tourism and hospitality.
"By the third quarter we are back to spring, which means more visitors and more employment. From then on, we are building to Christmas."
One of the areas to watch was the lack of wage growth, Mr McGowan said. It was the least understood area of the figures.
ASB chief economist Nick Tuffley said despite the strengthening labour market, he expected wage pressure to have remained subdued in the quarter.
A key consequence of New Zealand’s high net migration and high labour participation was job creation had only just outpaced the increasing labour supply.
ASB was expecting the Labour Cost Index to show private sector ordinary time labour costs rose 0.4% in the quarter, supported by the annual minimum wage increase. That would mean annual wage inflation at 1.6%, indicating real wages on a labour cost basis were flat during the year ended June.
Looking ahead, New Zealand’s robust growth outlook would support further strengthening in the labour market, Mr Tuffley said.
Combined with growth in the participation rate levelling off, ASB expected to see sustained upward pressure on wages in the next few quarters.
