KEY POINTS:
Job and earnings growth remained strong in the second quarter, but figures out today from Statistics New Zealand (SNZ) contained no nasty surprises.
The Labour Cost Index (LCI) recorded a 0.7 per cent increase in private sector salary and ordinary time wage rates for the three months to
June compared to the previous quarter. For the year the increase was 3.1 per cent.
Both figures were spot on the median expectations of economists in a Reuters poll.
The LCI measures changes in salary and wage rates for a fixed quantity and quality of labour input. Service increments, merit promotions and increase relating to the performance of individual employees are not shown.
In contrast the Quarterly Employment Survey (QES), also released today, reflects not only changes in pay rates, but also compositional and other changes across and within the paid workforce.
The QES figures for private sector ordinary time earnings were increases of 1 per cent for the quarter and 4.2 per cent for the year.
Those figures were below median expectations of 1.7 per cent and 5.2 per cent.
The QES also showed filled jobs up 2 per cent in the June quarter and up 2.1 per cent for the year.
Seasonally adjusted total paid hours were up 1.7 per cent in the quarter and 2.7 per cent from a year ago.
The QES put the increase in average total hourly earnings at 4.2 per cent, while seasonally adjusted total gross earnings increased 7 per cent.
UBS senior economist Robin Clements said the key message was probably that while the data was still strong there were no nasty surprises.
It would not allow the Reserve Bank -- which has the job of controlling inflation -- to relax but it also had not provided and reasons to be concerned.
Westpac economist Dominick Stephens said the wage data remained a worry for the Reserve Bank, but it would not be any more worried than before today's figures came out.
The LCI put the annual increase in salary and wage rates, including overtime, at 3 per cent for the public sector and 3.2 per cent for the private sector.
For the quarter, public sector rates rose 0.3 per cent, while the private sector lifted 0.8 per cent.
More data on the labour market is due out on Thursday in the second quarter Household Labour Force Survey.
- NZPA
