Wages and labour costs · New Zealand
New Zealand Labour Costs Index YoY
The New Zealand Labour Costs Index YoY measures how fast pay, or the total cost of employing people, is rising in New Zealand.
- Importance
- Medium
- Released
- Quarterly
- Next release
- Currency
- NZD · New Zealand dollar
- Central bank
- The Reserve Bank of New Zealand
Latest figures
The latest release for Q2, published on 4 August 2026, came in at 2.1%, above the consensus of 2%, up from 2% the time before.
A higher figure than expected makes the Reserve Bank of New Zealand more likely to keep rates high or raise them: it tends to support the New Zealand dollar and push bond yields up, and is often a weight on stocks.
Over the last 7 releases it ranged from 2.0% to 2.9%, averaging 2.3%.
| Released | For | Actual | Consensus | Previous |
|---|---|---|---|---|
| 4 Aug 2026 | Q2 | 2.1% | 2% | 2% |
| 5 May 2026 | Q1 | 2% | 2% | 2% |
| 3 Feb 2026 | Q4 | 2% | 2% | 2.1% |
| 4 Nov 2025 | Q3 | 2.1% | 2.1% | 2.2% |
| 5 Aug 2025 | Q2 | 2.2% | 2.3% | 2.5% |
| 6 May 2025 | Q1 | 2.5% | 2.7% | 2.9% |
| 4 Feb 2025 | Q4 | 2.9% | 3% | 3.4% |
Why it matters
Wages are the largest cost for service businesses, so wage growth well above productivity growth turns into lasting inflation. Central banks watch it to judge whether inflation will return to target; strong wage growth tends to keep the Reserve Bank of New Zealand hawkish.
How it is calculated
Pay data come from employer surveys, tax records or collective agreements; the release usually shows the change from a year earlier. Labour cost indexes include employers' social contributions and benefits.
Wage growth (yoy) = average pay ÷ average pay a year ago − 1
Real wage growth ≈ wage growth − inflationWhat changes mean
- Wage growth of about 3–3.5% is roughly consistent with 2% inflation when productivity grows about 1%.
- Compositional effects (low-paid workers losing jobs) can lift the average misleadingly.
Higher than expected: A higher figure than expected makes the Reserve Bank of New Zealand more likely to keep rates high or raise them: it tends to support the New Zealand dollar and push bond yields up, and is often a weight on stocks.
Lower than expected: A lower figure than expected gives the Reserve Bank of New Zealand room to cut or hold rates lower: the New Zealand dollar tends to soften and bond yields to fall.
A short history
The link between wages and inflation was described by A. W. Phillips in 1958 (the Phillips curve); it has weakened and strengthened over the decades but remains central to central-bank thinking.
New Zealand was the first country to adopt formal inflation targeting, in 1990.
Questions
What is the New Zealand Labour Costs Index YoY?
The New Zealand Labour Costs Index YoY measures how fast pay, or the total cost of employing people, is rising in New Zealand.
What was the latest New Zealand Labour Costs Index YoY?
2.1% for Q2, published on 4 August 2026 (consensus 2%, previous 2%).
When is the next New Zealand Labour Costs Index YoY?
On Tuesday 3 November 2026 at 21:45 UTC.
Educational content only, not investment advice. Figures are the published results as recorded by our calendar; market reactions described are typical, not guaranteed.