Wage costs have recorded their largest rise in 16 years, following inflation rather than the unemployment rate.
Statistics New Zealand says salary and wage rates rose 3.6% in the year to the end of September.
That is the largest annual increase since the labour cost index began in December 1992.
Labour costs increased 1.1% in the September quarter, up from 0.8% previously.
Wages and salaries in the private sector grew marginally faster in the private sector over the 12-month period compared with Government jobs.
The annual increase was marginally ahead of expectations of an increase of 3.5%.
Westpac research economist Dominic Stephens expects labour costs to continue to increase at a slower rate than inflation.
Separately, the Quarterly Employment Survey shows that while annual earnings growth remained strong, growth in demand for labour slowed in the September quarter.