Economy cooling off
Jobs growth in New Zealand is stalling, with the Monthly Employment Indicator (MEI) showing no change in May.
“Jobs growth has stalled as the economy continues to cool,” said Michael Gordon (pictured above), senior economist at Westpac NZ.
Employment trends and projections
The MEI, derived from income tax data, is a reliable indicator of employment trends.
The number of filled jobs is up by just 0.9% from last year, despite a 3% increase in the working-age population.
“The slowing pace of job creation is a recipe for a further rise in unemployment in the quarters ahead,” Gordon said.
Mixed industry performance
Job performance varied by industry. Construction sector jobs continue to decline, while gains are seen in wholesaling, finance, the public sector, healthcare, and recreational services.
Future revisions expected
Given the MEI’s tendency for initial overstatement, May’s result might be revised to show a small decline.
“We suspect that the May result will be revised to a small decline in the future,” Gordon said.
Read the Westpac report in full here.
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