NZ's unemployment rate expected to stay similar to last year's

New Zealand's unemployment rate is expected to remain much the same as it was last year when figures are released tomorrow, with the participation rate staying flat as more jobs are added to the economy.

Statistics New Zealand will release its major measures of wages and employment, with Westpac expecting unemployment to have fallen to 6.1% in December from 6.2% in September and ASB expecting an unemployment rate of 6.3%.

Westpac senior economist Michael Gordon said if unemployment dropped to 6.1%, it would be the lowest since June 2009.

Near-term indicators of the labour market had been unanimously positive but they had also been ''fairly consistent'' in saying the improvement in the December quarter was modest.

Job advertisements rose at a slightly faster pace, welfare payments fell modestly, business confidence surveys showed a lift in staff numbers and the Westpac McDermott Miller employment confidence survey found perceptions of current job opportunities were - by a narrow margin - the least negative in five years.

''We're also wary there was a sharp drop in participation in the December 2012 quarter, some of which may have been due to more young people moving out of the labour force and into study.''

Statistics NZ later said there was a distortion specific to the survey but that did not exclude the possibility of a new seasonal element to the job numbers, Mr Gordon said.

ASB economist Daniel Smith is expecting continued employment growth in line with the general economic recovery.

''After a period in which employment growth lagged well behind growth in the economy, the third-quarter 2013 showed a very strong 1.2% quarter-on-quarter gain in the number of people in work.

"The improving economic outlook, as well as indicators, such as the number of firms planning to take on more workers, suggest employment growth should strengthen over the year.''

Strong migration would have made a significant impact on labour market dynamics.

Last year, New Zealand gained a net 22,500 immigrants.

The inflow was mainly driven by a drop-off in the number of New Zealanders moving to Australia, along with a rise in the number of Kiwis returning home from across the Tasman, Mr Smith said.

Fewer job opportunities in Australia meant more New Zealanders would stay at home to look for work or hold on to jobs that would otherwise have gone to others.

Since the start of 2011, the economy has added more than 11,000 jobs in three out of 11 quarters, he said.

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