June 08 labour market: The first half
So the quarterly employment survey and the labour cost index came out yesterday.
Now remember that the pointer for me was hours worked – I wanted to see how far they fell before making any judgments on the state of the labour market. The kicker is that they rose!
According to the tables in the QES total hours worked was up 2.0% on a year ago, and up 0.5% (seasonally adjusted) on March. These figures are still weak were moderate (ht CPW), but they are stronger then I, or many analysts, were expecting – especially given the low level of net migration at the moment. Overall this suggests that unemployment could potentially come in below the 3.8% rate that is predicted by the market .
The LCI was marginally weaker than market expectations, rising 0.75% over the quarter compared to a forecast 0.8%. This took annual growth in the LCI to 3.5%. As the LCI is effectively productivity adjusted this is telling us that underlying inflationary pressures remain elevated.
Anyone else have much to say about the labour market data before the HLFS comes out on Thursday?
Other sites on employment: The Standard, Tumeke, Rates Blog.
Economists: BNZ, ANZ (not currently online), Westpac, ASB, Infometrics (subscription required).
Why call faster growth in hours worked than in working age population “weak”?
“Why call faster growth in hours worked than in working age population “weak”?”
True true, hours worked was up 2% while population rose 1.2%. However, over the last six months hours rose 0.5%, which would be a touch below population growth.
I guess I am sticking to the consensus line of viewing data in a negative light until the HLFS is out. If that surprises with lower unemployment then I might tie it into a stronger story 😛
However, the gap between the qes and hlfs hours worked concerns me – with the two series not converging I don’t know what to believe 😉