Unemployment is expected to have dropped slightly in the three months ended March to 6.8%, assuming recent positive-feeling surveys on the domestic economy prove accurate.
Westpac senior economist Felix Delbruck said he had paid special attention to the solid increase in reported hiring in the recent Quarterly Survey of Business Opinion - a sign skilled labour shortages were finally translating into stronger jobs - and to householders reporting jobs were becoming less scarce.
Statistics New Zealand releases its Household Labour Force Survey on Thursday and Westpac was assuming a modest fall in unemployment, he said.
The employment forecast of a 1.5% rise was largely payback from the December quarter's surprise 1% fall. Much of the fall seemed due to teenagers leaving their part-time jobs for education and training.
There was also some fall in participation among the 60-plus groups, possibly reflecting an ageing population, Mr Delbruck said.
Given the timing of the summer break, it was hard to explain why a sudden shift of young people out of work and into study should have occurred in the December quarter. One reason might have been the introduction of new benefits for teenagers in education and training in August last year, he said.
It was hard to find another labour market indicator that had been as weak as the labour force survey over much of the past year.
''Of course, that in itself needn't mean the survey is wrong. The labour force survey is the most comprehensive labour market survey we have, whereas many other indicators have gaps in their coverage.''
The survey had been behaving strangely recently, and Westpac had no strong reason to expect it to move into line this quarter, Mr Delbruck said.
There was suspicion the highly localised nature of recent jobs growth, largely confined to the Canterbury region, had caused both a genuinely slow labour market recovery and statistical problems with the survey.
There had been tentative signs that labour demand was starting to spread outside Canterbury, but it was probably too soon to expect a return to normal, he said.
Tomorrow, Statistics NZ releases its Labour Cost Index and the Quarterly Employment Survey. The main focus of the market would be on the LCI, which was less affected by changes in the job mix than the QES average wage. The LCI was also less volatile.
Westpac assessed that labour costs increased around 0.4% in the quarter, slightly below the historical average for the quarter.
