Labour costs up 0.4% – filled jobs rise points to employment growth
New Zealand labour costs rose in the first quarter and filled jobs increased, suggesting the household labour force survey on Thursday will show a return to employment growth.
Private sector ordinary time wages rose 0.4 percent in the first three months of the year from the fourth quarter of 2012 and gained 1.8 percent from the first quarter last year, according to Statistics New Zealand.
Economists are looking for some improvement in the labour market after a weak fourth quarter, when the participation rate fell to the lowest in almost nine years and employment shrank 1 percent. Figures in March showed the economy grew 1.5 percent in the final quarter of 2012.
The labour cost index for the first quarter was expected to hold at the fourth-quarter's 0.5 percent pace, according to a Reuters survey.
"Today's labour market reports were on the soft side of both market expectations and our own," says Felix Delbruck, senior economist at Westpac Banking Corp. "They confirmed that inflation pressure remains localised and subdued overall, and will leave the RBNZ comfortable keeping the OCR on hold for now."
Total ordinary time wages also rose 0.4 percent from the previous quarter to be 1.8 percent up from a year earlier.
Separately, the quarterly employment survey showed private sector ordinary time average hourly earnings rose 1 percent in the first quarter and were up 2.3 percent from a year earlier.
Public sector earnings rose 1.6 percent in the quarter and 1.4 percent in the year while total hourly earnings excluding overtime were up 0.8 percent and 2.1 percent, respectively.
Total filled jobs rose 0.4 percent, seasonally adjusted, from the previous quarter and rose 1.7 percent from a year earlier. Seasonally adjusted total paid hours were unchanged in the quarter and rose 2.3 percent from a year earlier.
Today's figures are the first leg on this week's employment releases. The key household labour force survey is expected to show the unemployment rate fell to 6.8 percent from 6.9 percent, while jobs growth climbed 0.8 percent and the participation rate edged up to 67.8 percent.