New Zealand's labour cost index rose 0.6 per cent in the three months ended December 31, with private sector wage inflation at a quarterly pace of 0.7 per cent and public sector at 0.4 per cent, according to a report by Statistics New Zealand released on Tuesday.

Reuters earlier reported a survey of economists, who predicted a 0.5 per cent rise in labour cost.

The latest figures show a moderate pace of wage inflation, allowing the central bank to keep interest rates low.

Total private sector average hourly wages were at $24.58, as overtime rates shrank 1.8 per cent in the quarter, according to the Quarterly Employment Survey, also released today.

In contrast, total public sector wages rose 0.8 per cent to $33.86 an hour, albeit overtime sank 6.3 per cent.

NZ Reserve Bank Governor Alan Bollard will be able to keep the benchmark interest rate at a record 2.5 per cent for a longer period of time given the latest wage figures.

On Thursday, the Household Labour Force Survey will be released, and it is expected to show unemployment fell 0.1 percentage points to 6.5 per cent, according to BusinessDesk.