Labour market 'could have been worse'

New Zealand's labour market is "bumping along the bottom," one economists says, but it could have been worse than it is.

The latest monthly jobs data shows filled job numbers rose 0.3 percent, or an additional 2515 jobs between April and May when seasonally adjusted.

But the numbers are frequently prone to revision and April's 0.2 percent rise has since been revised down to a 0.1 percent fall.

The goods producing sector added 242 jobs, the service sector 1977 jobs and public administration 6337 jobs.

The annual increase of 0.7 percent was the fastest in just over two years.

Healthcare added 5728 jobs and education 3245, as well as 3018 for financial services.

There were falls in jobs in professional services, manufacturing and administrative services. The South Island recorded more job growth than the North Island but Waikato recorded 1.4 percent annual growth.

Employment of young people continued to fall, with the number of jobs filled by people aged under 30 down 1.4 percent annum in March.

Infometrics principal consultant Rob Heyes said the labour market could be beginning to turn, and the government, education and healthcare sectors were providing a backbone.

He said there were also signs that retail, wholesale trade and construction could have reached the bottom of their job losses.

"We are heading in the right direction but I want to see a few more months of positive job numbers before I conclude we have seen the worst."

ASB economist said they expected jobs growth to slow given the impact of the Middle East conflict.

"This takes time to show in filled jobs data. It is frustrating that yet another delay to a burgeoning NZ recovery looks imminent."

Westpac chief economist Kelly Eckhold said the trend was noisy because it was subject to frequent revision.

He said the fall in jobs numbers for young people represented the stage of the economic cycle. "The ones with the lesser level of experience and skills, they're the ones that will always tend to be least likely to get work. For younger ones in particularly it tends to encourage them to go into alternative forms of training or perhaps drop out of the labour market for a while:

He said he expected unemployment to remain about 5.4 percent in the next update.

It should fall towards the end of the year, he said. "The unemployment rate is still expected to rise because even though we've probably got positive employment growth now, it's probably not strong enough to outweigh the increase in working age population that's just occurring naturally. We're basically just bumping along the bottom of the labour market."

He said a couple of months ago, forecasts were that the Middle East conflict could have had a larger impact on the labour market than it had. "We could have potentially got weaker outcomes than this. It could have been worse."

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