“Where men’s labour force participation rates have remained fairly stable, women’s rates have been steadily increasing over the last 30 years, narrowing the gap in engagement between men and women in New Zealand’s workforce,” StatsNZ said.
The New Zealand dollar and wholesale interest rates firmed in response to the data. By late morning, the kiwi was at US62.28c from US62.13 before the release. The two year swap rate – which has an influence on mortgage rates – rose to 5.13 per cent from 5.10 per cent.
Meanwhile, wages continued to rise.
In the year to the March 2023 quarter, all salary and wage rates (including overtime) as measured by the labour cost index, increased 4.3 per cent, compared with 4.1 per cent in the year to the December 2022 quarter.
Average total weekly earnings (including overtime) per full-time equivalent employee, as measured by the Quarterly Employment Survey (QES), rose 7.1 per cent in the year to the March 2023 quarter.
Average ordinary time hourly earnings in the QES rose 7.6 per cent in the year to the March 2023 quarter.
Annual wage cost inflation is at its highest level since the series began in 1992, up from 4.1 per cent in the year to the December 2022 quarter,” Stats NZ business prices manager Bryan Downes said.
”This aligns with other wage measures, like the unadjusted LCI (labour cost index) and average hourly earnings, both of which also had the largest annual increases on record.”
Wage cost inflation is the percentage change in all salary and wage rates (including overtime) in the LCI, which measures changes in the cost of labour incurred by businesses, adjusting for changes in the quality, quantity, and type of work.
The largest contribution to national wage inflation over the quarter came from the healthcare and social assistance industry.
Of the 1 per cent quarterly rise, over a fifth came from wage growth in healthcare and social assistance roles.
Average ordinary time hourly earnings, measured by the Quarterly Employment Survey (QES) increased 7.6 percent to reach $38.93.
This figure is the mean value of wages and salaries paid per hour, excluding overtime in jobs measured by the QES, so it can rise or fall as the type of work being done changes.
Labour market data for the first quarter was released at 10.45 - including fresh numbers for the unemployment rate and wage growth.
Reading the tea leaves, economists largely got it right - picking the labour market would stay tight with little change from the previous rate of 3.4 per cent.
Westpac and Kiwibank picked no change at all, ASB predicted a slight bump to 3.5 per cent and ANZ picked a dip to 3.3 per cent.
Regardless of where the final number landed, “the labour market remains tight as a drum,” said Kiwibank chief economist Jarrod Kerr.
Meanwhile, wage growth would likely continue to lift as labour demand remains strong, and employees sought pay rises in a cost of living crisis, he said.
Kiwibank expects the annual wage bill will hit a new survey high of 4.6 per cent.
Wage growth tended to be the most lagging element of the economic cycle, said Westpac senior economist Michael Gordon.
“With that in mind, we think that the current upturn in wage growth has further to go, even with consumer price inflation now clearly past its peak.
Westpac expected a 1.1 per cent rise in the Labour Cost Index (LCI) for the March quarter, which would take the annual growth rate to a record high of 4.4 per cent.
There is a broad consensus that we are headed toward an unemployment peak of about 5.5 per cent as the economy slows.
Compounding the forecasts for this quarter, on two fronts, is the ongoing fallout from the Auckland flooding and Cyclone Gabrielle.
The weather events add a layer of complexity to the economy through the immediate financial damage they caused - literally wiping out businesses and jobs - as well as adding to labour shortages in the construction sector as the rebuilding gets underway.
