Some economists are predicting robust jobs growth and weak pay rises once again when the latest figures on the historical state of the labour market are released on Wednesday.
Auckland job growth was up 20 percent, Canterbury by nearly 10 percent and Wellington by nearly 8 percent. Photo: 123RF
They are also expecting unemployment will rise from 5.8 percent, due to more people searching for work - including record numbers of immigrants, and beneficiaries facing tougher work rules.
ASB Bank senior economist Chris Tennent-Brown expected strong quarterly employment growth of 0.8 percent, which will lift annual employment growth to 3.7 percent.
"Business surveys have suggested employment growth remains healthy, despite the soft start to the year from a GDP growth perspective."
Mr Tennent-Brown said most of the economic weakness was in the agricultural sector, but more labour-intensive parts of the economy have performed well so far this year.
He said the increase in labour supply should keep wage growth subdued at under 2 percent.
"We are seeing a bit of slack in the labour market."
Mr Tennent-Brown said that should lead the Reserve Bank to cut interest rates further.
"With not much in the way of (wage) inflation coming from the labour market and not much inflation full stop within the New Zealand economy, we think the Reserve Bank is going to deliver a couple more rate cuts over the course of this year."
Westpac Bank said a slowing economy was expected to dampen demand for workers.
Westpac senior economist Satish Ranchhod said higher import costs due to the falling dollar would put pressure on households' purchasing power.
Ranchhod said, combined with continued weak wage growth and a likely pick-up in unemployment, many households will find their spending power is getting squeezed.