Wage growth slowed in the March quarter as public sector wages, including overtime, rose 4.3% from a year ago, while private sector wages rose 3%, figures from Statistics New Zealand (Stats NZ) show. Overall, these rises led New Zealand's Labour Cost Index to rise 3.3% from the March quarter in 2008. Overall wage rates in the March quarter rose 0.6% from the December quarter, the lowest quarterly rise in two years, Stats NZ said. The yearly 3.3% rise in the LCI was down from annual growth of 3.5% in December and 4% in September. It was also slightly below June and March 2008 annual wage growth. JP Morgan economist Helen Kevans said she expected wage growth to continue to ease over 2009, negatively affecting New Zealand's economic growth:
"With labour market conditions continuing to ease, we expect that wage growth will moderate even further throughout 2009," Kevans said. "Slower wage growth, rising job insecurity, and increasing redundancies mean that consumers will continue to curb spending. In our forecasts, household spending will fall by more than 1% this year, stifling already sub-par economic growth." Stats NZ is set to release the latest unemployment figures on Thursday at 10:45am.
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