Wage Growth Lags Behind Inflation as Cost of Living Continues to Rise

New Zealanders are struggling to keep up with the rising cost of living as wage growth continues to lag behind inflation.

Data released by Stats NZ shows that labour cost index data for salary and wage rates were up just 2 percent over the year to June, while annual inflation is running at 4.1 percent.

Kiwibank economist Alexandra Turcu said wages are effectively going backwards compared to inflation, with the cost of things increasing twice as much as the average Kiwi's pay packet.

Transportation and housing costs have been driving up prices, and while some industries like wood and paper products manufacturing saw wage increases above 3 percent, others such as retail trade and accommodation grew at a slower pace.