Q4 Labour Market Review: Contained wage backdrop despite tight labour market

  • Employment from the Household Labour Force survey (HLFS) rose in line with market expectations. Measures of labour utilisation were at historically-high levels, with the unemployment rate falling to 4.5% of the labour force, a new 9-year low.
  • The Q4 figures depicted a contained wage backdrop, with few signs of widespread wage pressure. The tight labour market and pending increases in the minimum wage are expected to push up overall wages, but there are question marks as to how widespread the increases will be across the labour market.
  • The tight labour market keeps the bias tilted towards a higher OCR, but the contained backdrop for wage inflation suggests no immediate need for the RBNZ to deviate from its on-hold stance. The RBNZ will be closely following developments in wage inflation for guidance on future OCR moves.

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Nick Tuffley

ASB Chief Economist

Since starting out in 1997 as an economist, it's fair to say Nick has seen a few hair-raising moments over the years, including the Asian Financial Crisis and the Global Financial Crisis.

One of Nick's strengths is his ability to communicate complex ideas in a readily understandable and entertaining way.  He thrives on helping people understand the economic environment to help enrich the quality of their business or personal life. He’s proud to lead a team that has won two Forecast Accuracy Awards from Consensus Economics, and has a strong track record with their Official Cash Rate and dairy price forecasts. 

Nick grew up in Christchurch and graduated with a Master of Commerce degree from the University of Canterbury.  He learned his economic ropes at the Reserve Bank of New Zealand before a long stint as a Senior Economist at Westpac, and joined ASB as Chief Economist in 2007.

Mark Smith

Senior Economist

Mark joined ASB in 2017, with over 20 years of public and private sector experience working as an economist in New Zealand and the UK.

His resume includes lengthy stints at ANZ and the Reserve Bank of New Zealand, and he has also worked at the Bank of England, HM Treasury and the New Zealand Transport Agency. Mark's areas of specialisation include interest rate strategy, macro-economic analysis and urban economics.

Born and bred in the Waikato, Mark studied at Waikato University where he graduated with a Master of Social Sciences, majoring in Economics.

Mark's key strengths are the ability to use his extensive experience, inquisitive nature, analytical ability, creativity and pragmatism to dig a little deeper and to deliver common sense solutions to tackle complex problems.

When not at work Mark likes to travel, keep fit and spend time with his friends and family.