Labour market slack, wages, and inflation Having discussed the underlying causes of the recent strong growth in the labour force, I would like to conclude by discussing the implications for monetary policy. The labour market most directly influences consumer price inflation through wage outcomes.
This is particularly true of non-tradables goods and services, where labour represents a higher share of the total cost of production.15 Broadly speaking, wage outcomes are  14  Over the last 35 years, New Zealand has lost, on average, 16.5 thousand people per year through net emigration to Australia, In the past 12 months New Zealand gained 1600 people from Australia.