Strong labour market data makes Governor Alan Bollard's speech seem a little gloomy
The economy has been growing again for a year now and that is finally having a positive impact on the labour market, or so the latest jobs data suggest.
The March quarter recorded the steepest fall in the unemployment rate (from 7.1 to 6 per cent) and in the number of people unemployed (from 165,000 to 140,000) in the 24 years for which comparable statistics have been compiled.
Drill down into the numbers and they still look good.
It is not a matter of a lot of people getting discouraged and withdrawing from the labour force.
It is not a matter of people leaving for Australia's greener pastures, either. Departures for the lucky country are rising but are still 17.5 per cent down on a year ago.
Nor is it just growth in part-time work - full-time jobs increased more than jobs overall.
But every silver lining has a cloud.
By showing the domestic economy has more life in it than had been thought, the strength of the jobs figures has probably sealed the deal for Governor Alan Bollard to start raising interest rates at the next opportunity, in June.
In a speech yesterday morning he talked about a fragile recovery in the inward-facing sectors of the economy, with business "bruised" and "behaving very cautiously, still not looking to invest in plant and equipment or re-employ staff".
No sooner had he made those comments than the last part at least looked too gloomy, when the statisticians reported a jump of 22,000 or 1 per cent in the number of people employed.
As a result the financial markets now regard a June start to interest rate rises as in the bag. A year from now they expect interest rates to be more than 2 percentage points higher.
