Economists say the labour market is at maximum employment, or very close to it. ANZ said it was “hard to escape the conclusion that New Zealand’s economy is already at or above maximum sustainable employment”. It refers to the unemployment rate that is consistent with its 2 per cent inflation target as “Nairu”, the non-accelerating inflation rate of unemployment. ASB chief economist Nick Tuffley said the Nairu rate had probably already been reached, but the unemployment rate was likely to fall a bit further through 2022. That makes active labour market policies quite important, something we’re not so flash at by OECD standards.

Source: Stuff July 08, 2021 01:18 UTC