It was a pleasure speaking as part of the Visiting Executives Programme last year, and even more so to have been invited back. Today I want to consider inflation pressures through the lens of the labour market. We have seen some extraordinary developments in the New Zealand labour market over the past three years and these pose challenges to our modelling of inflation pressures.
Employment in New Zealand has increased by 180,000 or 8.3 percent over the past three years. In previous periods of very strong employment growth, such as the mid-2000s and the mid-1990s, wage growth accelerated. In the current cycle it has remained moderate.