By Paul McBeth
New Zealand wage inflation accelerated in the third quarter, though is still soft enough to keep the central bank wary of hiking interest rates with private sector wages climbing at a softer-than-expected pace.
The labour cost index rose 0.6 percent in the three months ended Sept. 30, in line with a Reuters survey of economists, as wages and salaries, according to Statistics New Zealand.
Public sector wage costs grew 0.6 percent in the quarter while private sector labour costs rose 0.5 percent. Still, labour costs in the private sector have outpaced their public counterparts on an annual basis, up 2 percent compared to 1.8 percent.
“The average size of annual increases has remained fairly steady for the past 18 months,” Cathryn Ashley-Jones, acting government statistician said in a statement.
Since the recession, “the proportion of surveyed pay rates showing annual rises has grown – from 43 percent in the year to the March 2010 quarter to 56 percent in the year to the September 2011 quarter.”
Total private sector average hourly wages grew 1.2 percent to $24.58 an hour, short of the 2.1 percent forecast by Reuters, outpacing the 0.9 percent average wage growth in the public sector, according to the Quarterly Employment Survey also released today.
Last week, Reserve Bank Governor Alan Bollard played down inflationary fears, keeping the official cash rate on hold at 2.5 percent, as the latest global financial downturn damps appetite to tighten local monetary policy.
Today’s release comes ahead of Thursday’s household labour force survey, which is expected to show the unemployment rate fell to 6.4 percent from 6.5 percent in the June quarter. Economists are wary of the data beating expectations with the Rugby World Cup kicking off in the September quarter, which may bolster the casual and part-time workforce.
The actual number of full time equivalent employees (FTEs) fell 0.6 percent to 1.32 million people as expected, and is up 0.4 percent on an annual basis. Total filled jobs was flat at 1.69 million, while total paid hours fell 1.2 percent in the quarter to 50.4 million. On a seasonally adjusted basis, FTEs rose 0.1 percent, while filled jobs grew 0.7 percent.
Rental, hiring and real estate services reported the biggest jump in FTEs, up 7.3 percent to 20,600, followed by 2.9 percent gains in electricity, gas, water and waste services to 10,500 and retail trade to 133,100.
Manufacturing FTEs dropped 3.5 percent to 168,600 in the quarter in its second quarterly contraction.
(BusinessDesk)
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