High unemployment levels are unlikely to have changed and wage growth is likely to remain subdued, bank economists have predicted for the quarterly household labour force survey due out tomorrow.
Westpac chief economist Dominick Stephens said he expected employment to have risen by 0.5% for the quarter to December, but unemployment to stay elevated.
"We don't expect this week's labour market reports to look much rosier than three months ago," he said in a statement.
Mr Stephens said the ongoing high unemployment rate meant wage inflation was likely to be subdued as well.
"Employment just barely eked out growth in the six months to September, and the unemployment rate inched back up to 6.6% as jobs growth failed to keep up with growth in the labour force," Mr Stephens said.
ASB economist Jane Turner said employment growth was "surprisingly subdued" during the third quarter, because of continued job losses in Canterbury.
The declines in employment were largely concentrated in the retail and hospitality sectors, consistent with ongoing CBD closures as result of the earthquakes.
However, excluding Canterbury, employment growth throughout the rest of the country remained robust, suggesting that underlying demand for labour has continued to recover during 2011, Ms Turner said.
She also expects employment growth of 0.5% to be reported for the fourth quarter, which would lead the unemployment rate lower, from 6.6% to 6.4%.
"We expect that employment in Canterbury has started to stabilise, while the momentum in hiring throughout the rest of the country has continued," she said.
The recent NZIER quarterly survey of business opinion was "particularly encouraging", as it indicated there was a strong increase in employment during the fourth quarter, she said.
Mr Stephens said the NZIER survey showed "slightly above average" hiring in the construction sector and, at this stage, was a decent guide to employment conditions in that sector.
"The seesaw pattern that's been an increasing feature of measured employment growth over the past decade suggests we're due a bounce-back," he said.
