Shorter dole queue only part of the picture

New Zealand's dole queue shrank by almost 4000 people last month - but other signs point to a slight weakening in job growth.

Social Development Minister Paula Bennett said the number of people on the unemployment benefit dropped by 3934 last month, compared with an increase of about 2430 in the same month last year.

But the country's biggest jobs website, Seek, will announce today that its job advertisements dropped by 0.2 per cent last month on a seasonally adjusted basis, the first fall since November.

The number of job applications submitted through Seek's website increased, so the ratio of jobs to jobseekers dropped more sharply, by 5 per cent.

"This slight decrease is a typical trend for March following the New Year flurry of seasonal recruitment and not one that signals an ongoing downward trend," said Seek NZ manager Annemarie Duff.

But ASB Bank economist Chris Tennent-Brown said ASB expected the unemployment rate to stay at or above 7 per cent of the workforce until June 2011 and to drop below 6 per cent only by December 2012.

Australia's unemployment rate has already dropped to 5.3 per cent.

"Most people are thinking that the labour market is going to start creating jobs in the first half of this year," Mr Tennent-Brown said.

"But for unemployment most people are forecasting the same as us, that it's going to be a long slow grind back down as we get some job growth but we also get some growth in the working-age population and some participation increase as well."

The March unemployment rate will be released on May 6.

Numbers on the unemployment benefit have fallen in the March quarter every year in the past decade except last year, as students head back to their studies and summer seasonal work peaks.

The drop of 6117 from December last year to March this year is the biggest drop since a fall of 9951 in the same quarter of 2007.

The seasonal fall was only 3714 in 2008 and became an increase of 6638 last year.

The total on all welfare benefits dropped by 20,662, from a six-year peak of 345,476 in December to 324,814 at the end of March, also the biggest improvement since 2007.

Seek's data shows that new advertised jobs plunged to a low point last June of only 41 per cent of their 2008 peak, and have now recovered only to 55 per cent of that peak. Current advertisements are 13 per cent higher than in March last year.

The March numbers were swollen by the first batch of jobs for the new Auckland Super City, making local government the top sector for new jobs.

Advertised jobs rose by 0.8 per cent in Auckland and 0.1 per cent in Wellington, but fell by 2.5 per cent in Christchurch.

Trade Me jobs data released on Sunday showed that vacancies listed on its website rose by 9 per cent in the March quarter but were still 3 per cent below where they were in March last year.