2018 Economic Calendar
2017 Econoday Investor's Journal Buy Now
POWERED BY  econoday logo
U.S. & Intl Recaps   |   Event Definitions   |   Today's Calendar

New Zealand : Labour Market Conditions  
Definition
The Labour Cost Index (LCI) measures movements in base salary and ordinary time wage rates and overtime wage rates. The non-wage component measures cost changes including annual leave and statutory holidays; superannuation; ACC employer premiums; medical insurance; motor vehicles available for private use low interest loans. The LCI is a measure of the extent to which changes in businesses' input costs put pressure on the output prices they charge for goods and services.

Why Investors Care
As a measure of labour cost, the LCI helps the Reserve Bank of New Zealand measure inflation. The RBNZ, with an inflation target range of 1 percent to 3 percent uses this index in addition to other price indices to measure possible pressures in consumer prices.

RBNZ officials are always on the lookout for the prospects of inflationary pressures. Wage pressures tend to percolate when economic activity is booming and the demand for labor is rising rapidly. During economic downturns, wage pressures tend to be subdued because labor demand is down. By tracking labor costs, investors can gain a sense of whether businesses will feel the need to raise prices. If wage inflation threatens, it's a good bet that interest rates will rise, bond and stock prices will fall.

Frequency
Quarterly

Source
Statistics New Zealand

Availability
Data released about five weeks after the reference quarter. Fourth quarter data were released on February 4.

Coverage
Previous quarter

Revisions
Yes


powered by  [Econoday]