All important labour market data is out this week with expectations that the slowdown in the economy and a record level of immigration will combine to lift the jobless rate.
Unemployment levels are expected to rise this week. Photo: RNZ
Unemployment is currently at 5.9 percent, but that is expected to rise, with the economy not able to produce enough jobs to keep pace with a workforce that has been boosted by more than 60,000 migrants over the past year.
At the same time, wage numbers were expected to reaffirm that labour costs were low and offered no spur to overall inflation.
Westpac senior economist Satish Ranchhod is forecasting a jobless rate of 6.2 percent.
"We do see some further risks, particularly with a likely slowdown in growth in response to drought, the slowing of the Canterbury rebuild and headwinds coming from offshore.
"We're expecting to see pretty modest wage growth over September. We've pencilled in a 1.9 percent increase for the year," he added.