WELLINGTON, Aug. 3 (Xinhua) -- Jobs growth was up, but wages were subdued in New Zealand in the June quarter, the government statistics agency said Wednesday, fueling expectations of imminent central bank interest rate cuts.
Job numbers rose a strong 3.1 percent in the year to the end of June, driven in part by accommodation and food services, construction, and health services, according to Statistics New Zealand.
"There were 14,000 more jobs in accommodation and food services, up a strong 11 percent in the June year," business prices manager Sarah Williams said in a statement.
The growth compared with a 2.2-percent rise in filled jobs in the year to the end of March.
However, annual wage growth remained subdued in a period of low consumer price inflation.
Annual wage inflation rose 1.5 percent in the June year, in line with levels for the past three years, while the consumer price index rose 0.4 percent.
"The gap between the labor cost index and inflation was 1.1 percentage points, the smallest gap since the end of 2014," Williams said.
Tertiary Education, Skills and Employment Minister Steven Joyce said in a statement that wage growth was "increasing at a healthy margin over inflation" and continued a trend of moderate real wage growth.
However, an economic note from the ASB Bank said the wage growth at 0.35 percent quarter-on-quarter was weaker than market expectations of 0.5 percent.
The "muted wage inflation" would create a more challenging inflation environment for the Reserve Bank of New Zealand (RBNZ), which has been watching inflation tracking well below its 1-percent to 3-percent target range.
"The softer growth comes despite evidence of labor becoming more difficult to find over the first half of the year. If this trend continues, it would suggest the fall in inflation expectations over the past year is starting to suppress wage growth," said the note.
"This dynamic would be very concerning for the RBNZ, as it makes it more difficult for the RBNZ to bring inflation back to target."
The ASB expected the RBNZ to cut its official cash rate -- currently at 2.25 percent -- by 25 basis points at its review next week and by another 25 basis points in November.
