Wages growth continued to ease over the first three months of the year, from its peak in September last year.
Private sector salaries and ordinary-time wages rose 0.5 per cent in the quarter, the weakest increase in five years, Statistics New Zealand said.
It brought the annual rate of wage
inflation down to 3 per cent from 3.2 per cent in December and 3.7 per cent in September.
With overtime, the quarterly increase was 0.6 per cent and the annual 3.1 per cent - in line with Reserve Bank forecasts.
ASB chief economist Nick Tuffley said that with wages growth matching Reserve Bank expectations, the outcome would have little influence on its interest rate stance beyond confirming that wage-related inflation pressure was easing and would contribute to low inflation over the next couple of years.
As they have for most of the past four years, public sector wage rates outpaced the private sector, rising 0.6 per cent in the quarter and 4.3 per cent in the year.
The labour cost index seeks to measure increases in pay for a fixed quantity and quality of work - the rate for the job. Pay increases reflecting individual merit or years of service are stripped out.
The unadjusted index, which leaves them in and is a better reflection of what is happening to pay packets, rose 0.8 per cent in the quarter - the smallest increase for two years - making 5 per cent for the year.
When the public sector is included the quarterly increase was still 0.8 per cent but the annual increase was 5.2 per cent.
In the March quarter 29 per cent of salaries and wage rates were between 3 and 5 per cent higher than they had been a year earlier and 22 per cent were more than 5 per cent higher.
