Jobless rate may edge higher in 1H13

Hopefully it won't hit 4%-5%.

According to Moody's Analytics, the labour market has softened in line with the economy. Employment growth has slowed and the unemployment rate has drifted higher in recent months, although it remains relatively low at 3.4%.

Employment in domestic-oriented sectors is performing better than export-facing industries. Job are being added in professional, business and social services, as well as real estate, construction and retail trade but are being lost in import/export and wholesale trade and manufacturing.

Here's more from Moody's Analytics:

These trends are expected to persist for the meantime, which will likely push the unemployment rate higher through the first half of 2013, but it is not expected to spike to the 4% to 5% rates witnessed in 2008 and 2009.

As the global economy gains traction later this year, export-oriented industries should begin to add jobs, with positive spillover benefits for domestic-facing sectors. Notably, strong inbound tourism from the mainland will support jobs and sales in the big retail industry. On balance, the unemployment rate is expected to settle around 3.5% by the end of 2013.