KEY POINTS:
Figures out today on salary and wage rates, and on job numbers, suggest a possible easing in pressure on the labour market.
Statistics New Zealand's (SNZ) Labour Cost Index (LCI) shows salary and ordinary time wage rates up 3.2 per cent in the year to the March 2007 quarter -- the same as recorded in the two previous quarters.
For the March quarter the rise in salary and ordinary time wage rates was 0.6 per cent, down from 0.9 per cent the previous quarter.
Overtime wage rates were up 3.8 per cent in the year to the March quarter, the largest annual increase since the overtime series started in the December 1992 quarter.
For the March quarter, overtime wage rates were up 0.5 per cent, down from 1.1 per cent in the previous three months.
Salary and wage rates, including overtime, increased 3.1 per cent in the year to the March 2007 quarter, slightly down from the 3.2 per cent annual increase in the previous three quarters.
For the March quarter the increase was 0.6 per cent, following increases of 0.9 per cent and 1 per cent in the December 2006 and September 2006 quarters.
The LCI measures changes in salary and wage rates for a fixed quantity and quality of labour input.
It does not show service increments, merit promotions and changes relating to the performance of individual employees.
In contrast, average earnings statistics in the Quarterly Employment Survey (QES), also published by SNZ today, reflect not only changes in pay rates, but also compositional and other changes across and within the paid workforce.
QES results for the year to March 2007 showed the rate of employment growth had eased, SNZ said.
Employment, as measured by the number of full-time equivalent (FTE) employees was up 1.6 per cent for the March 2007 year, the smallest annual increase since the March 2000 year.
The increase was mainly driven by the property and business services, construction and health and community services industries.
Average total hourly earnings were up 4.6 per cent for the March year, while seasonally adjusted total paid hours were up 2.1 per cent and adjusted total gross earnings up 6.8 per cent, the QES showed.
For the March quarter, FTE numbers were down 0.9 per cent from the previous quarter due to the seasonal influence of the education industry.
The QES showed that stronger annual growth in full-time employment than in part-time continued, with full-time up 2 per cent for the March year while part-time was down 0.7 per cent.
Seasonally adjusted total paid hours were down 0.5 per cent for the March quarter, and up 2.1 per cent for the year.
Total paid hours were up 2 per cent for the year.
The LCI showed private sector salary and wage rates, including overtime, up 3 per cent for the March year and 0.6 per cent for the quarter. That compared with a 3.1 per cent increase for the year to December and a 0.9 per cent rise in the December quarter.
Public sector rates were up 3.8 per cent for the year and 0.6 per cent for the quarter, following increases of 3.6 per cent for the December 2006 year and 0.9 per cent in the December quarter.
Goldman Sachs JBWere economist Shamubeel Eaqub said some easing was obviously coming through, while paid hours, with a 0.5 per cent fall for the quarter, were "very weak".
But fairly elevated wage inflation was continuing when productivity did not justify it, he said.
UBS senior economist Robin Clements said the data suggested that maybe the worst in wage pressures had now passed.
Deutsche Bank chief economist Darren Gibbs said that if today's data was verified by the Household Labour Force Survey, to be published on Thursday, the chance of the Reserve Bank raising interest rates in June was low.
The NZ dollar slipped a little on today's data, from US73.65c at 10.45am, when the data was released, to US73.45c an hour later.
- NZPA
