However, layoffs diminished noticeably in January, and employment turned up last month. Moreover, initial claims for unemployment insurance have decreased markedly, on balance, providing further evidence of an improvement in labor market conditions. The dynamics of inventory investment and the balance of factors influencing consumer demand will have important consequences for the economic outlook in coming months.
Even in New Zealand where we have been less affected, recovery has been slow and patchy. In fact, 2010 was a disappointing year: we initially saw recovery happening, but the second half went unexpectedly soft (as it did in many OECD countries). During 2011 we expect the recovery to pick up and gradually become more secure. The international outlook continues to be uneven.