New Zealand Treasury’s monthly report - Wage pressures remain subdued

“Despite the modest tightening in the labour market, wage pressures remain subdued”, says the latest monthly report from the New Zealand Treasury.

Key points

Internationally, support for interest rate rises is increasing in the US and EU, though ECB officials continue to downplay expectations.

Most measures of wage growth are now below the rate of consumer price inflation, which lifted to 2.2% in the year to March

Although wage pressures remain modest, the combination of high employment, recovering farm incomes (more on this later), and population growth has boosted aggregate household incomes in the economy

Employment growth led to a lower unemployment rate of 4.9%

House prices were fairly flat, while sales and consents fell

Dairy export values were up 35% from a year ago and Fonterra increased its Farmgate Milk Price

High net migration, visitor numbers and employment growth led to retail sales growth of 1.5% (sa) in March