Westpac expect "a small rise in the.....>

NEW ZEALAND: Westpac expect "a small rise in the unemployment rate to 4.4% in

the March quarter. Low business confidence appears to have led to a slower pace

of hiring. The labour market has tightened in recent years, and is close to

estimates of the sustained maximum level of employment. However, the Reserve

Bank would be concerned if employment trends were heading in the wrong

direction. We expect a 0.5% rise in the Labour Cost Index (LCI) for the private

sector, lifting the annual growth rate above 2%. For the QES average hourly

earnings measure, which tends to be more responsive to the cycle, we expect a

0.8% quarterly increase. There were no special factors that we're aware of in

the March quarter, but subsequent quarters are likely to see a boost from public

sector pay agreements and the large 7.3% increase in the minimum wage in April."