Salaries 'jump at record levels' but interest rate cuts still coming
12:10PM Monday August 04, 2008

New figures show pay rates rising at a record pace, but economists do not see them bringing any delay to further interest rate cuts by the Reserve Bank.

The Labour Cost Index (LCI) released by Statistics New Zealand (SNZ) today showed salaries and wages, including overtime, rising at a record rate of 3.5 per cent in the June year.

The latest increase in the LCI was the largest annual rise since the series began in 1992, beating the previous record of 3.4 per cent in the March 2008 and December 2007 years.

For the June 2008 quarter, salary and wage rates, including overtime, were up 0.8 per cent, following an increase of 0.7 per cent recorded in the March quarter and 1.1 per cent in the December quarter.

As measured by full-time equivalent employees (FTEs), employment increased 2.5 per cent for the June 2008 year, according to the Quarterly Employment Survey (QES) also released by SNZ today. That compared to growth of 3.5 per cent for the March year.

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