Unemployment is set to push up to a near 11-year high with too many people and a weak supply of jobs.

Major bank economists expect the unemployment rate to inch up to 5.4% or 5.5% for the three months ended June, from the 5.3% rate in March.

Westpac senior economist Michael Gordon said employment growth was subdued.

"The jobs market has held its ground through the Middle East conflict, but it hasn't gathered the momentum that we would have otherwise hoped to see.

"Employment has been gradually picking up again in recent months, but not quickly enough to keep up with population growth."

Expectations are that a few thousand jobs may have been created during the quarter.

ANZ senior economist Miles Workman said businesses had not been firing staff to any extent, but weak economic activity meant there was little hiring either.

"Overall, the Q2 data are expected to paint a relatively soft picture of the labour market, with firms having pressed the pause button in response to the oil price shock and heightened global uncertainty."

He said he would be looking for clues on the underlying state of the labour market, such as the number of hours worked.

"Firms typically reduce available hours during a downturn before resorting to layoffs, particularly when they expect any weakness to be temporary."

Labour market numbers can be a statistical lottery, with the unemployment rate influenced by the size of the workforce, how many are participating, are doing training, have stopped looking for work, irrespective of how many jobs may have been created.

Other labour market indicators have painted a generally gloomy picture.

The Institute of Economic Research's June quarterly survey (QSBO) showed weak demand for staff, while the Westpac-McDermott Miller Employment Confidence index plunged to its lowest reading since its inception.

Peak unemployment?

An economic cliché is that the labour market is "a lagging indicator" - it's the last part of the economy to fall in a downturn and the last to rebound in the recovery.

ASB acting chief economist Kim Mundy was crossing fingers that the latest number is likely be peak unemployment, volatility aside.

"Hopefully this is as high as unemployment is going to go ... should things happen as we expect them to we expect the economy to generate more momentum as we go into the end of this year and entrench a labour market recovery in 2027."

Wages are expected to have grown around 2% over the past year, which would satisfy the Reserve Bank (RBNZ) that there is little risk in it adding to inflation pressures driven to a two-year high of 4.1% by the US-Iran war.

The RBNZ no longer has a specific instruction to help the labour market and maximise employment, but nonetheless always casts an eye over labour market health.

ANZ's Workman said labour market weakness was one factor helping to contain inflation pressures.

"While contained wage growth is not good news for households facing acute cost-of-living pressures, it does mean that wage-price spiral risks are mitigated, reducing the likelihood that the RBNZ will need to lift the official cash rate OCR into outright restrictive territory - that is, well beyond 3%."