Recovery is proving to be slow for the job market, with economists expecting an increase in unemployment when the latest labour market numbers are released on Wednesday.
Infometrics principal economist Brad Olsen told AM employment figures are expected to get worse, especially considering "a lot of lays offs" in the media and Government sectors.
He noted that many of those people won't actually be out of work yet, so we won't see the full impact in Wednesday's unemployment figures.
"But we have been expecting things [unemployment] to rise."
Olsen said the thousands of announced job cuts wouldn't be captured until likely the second half of the year.
"You look at the Government departments, for example, a lot of those are being announced, they're still working through them," he said.
"They've sort of put a proposal out, they want to cut X many jobs but they haven't decided exactly who's going yet or when that'll come through. It's probably more likely June, July when the Government budget changes over to the next fiscal year that those changes come back.
"You look at, again, the media - those changes not happening until later this month or into July. So a lot of people, I think, are nervous at the moment, a lot of people knowing that their jobs might not exist or that it’s more difficult to find a job but actually not coming though in the [this week's] unemployment data."
Olsen also noted that job ads at the moment were "particularly low".
"Although there are people who are losing jobs, not nearly as many to get back into at the moment. The number of jobs on some of the jobs listing sites across the country are down, I think, something like 15 percent from 2019 levels.
"So it is a lot tougher out there in the labour market - not quite as many jobs coming forward but a lot of people starting to get notice that their role might not be there in the future."
The unemployment rate is currently four percent, with experts, including the Reserve Bank, expecting that number to rise to five percent later in the year.
"People aren't spending as much, businesses presumably don't need as many staff to do all of that work because there's not as much to go around," Olsen said.
He added that New Zealand's population has grown 0.7 percent, a "solid increase", in the past three months.
"The difference though is that we have been seeing jobs growth slowing, all of a sudden it seems to have bounced back so we've actually seen that jobs growth increase 0.7 percent as well this quarter.
"If that's the case, you could well see the unemployment rate remain around four percent, that might sound like a good thing, but the Reserve Bank is trying to get inflation under control and so far the jobs market doesn't seem to be cooperating."
Olsen explained how unemployment hits people individually and inflation hits everyone at a larger level.
"So there is a bit of a trade-off… what we're trying to find now is a bit more of a middle ground, bit more of a Goldilocks zone. You certainly don't want really record high unemployment, that's devastating for people, but equally we're trying to find where that middle ground is a little bit more so that inflation comes back and then we can start to rehire people again."
