wellington feb 1 reuters  new zealands jobless rate held just above historic lows and wage inflation hit a threedecade high but there are signs the labour market is easing adding to expectations the central bank will pull back on the size of its interest rate hike this month data released by statistics new zealand on wednesday highlighted the countrys tight labour market with wage inflation labour force participation and employment all at their highest in more than three decades however fourthquarter inflation and employment have both undershot the reserve bank of new zealands rbnz november forecasts and some economists are paring back expectations the central bank will again increase the cash rate by a record 75 basis points bps when it next meets in february “a little steam came out of the labour market at the end of last year” said kiwibank economists in a note the unemployment rate increased to 34 in the december quarter the statistics data showed slightly higher than a forecast of 33 from economists wage growth was also strong in the quarter with the private sector labour cost index lci excluding overtime recording a 41 lift on year slightly below a forecast 43 increase rbnz has been aggressive in its efforts to dampen inflation and in november hiked the official cash rate by 75 bps to 425 and promised further increases however overnight indexed swaps now imply a peak for the cash rate of 519 down from 528 on tuesday both asb bank and bank of new zealand now expect the central bank will move only by 50 bps rather than 75 bps in february following a similar downgrade by anz and kiwibank last week the need for outsized ocr official cash rate hikes  looks less urgent asb bank said adding that there remains a fine line between the bank hiking by 50 bps and 75 bps furthermore indicators are starting to show there is a softening in the labour market for the current quarter as well and economists expect the unemployment rate to start lifting later in 2023 as we look to 2023 timely indicators point to a significant easing in labour market pressures with job ads monthly filled jobs growth and employment intentions all easing significantly in recent months anz economists said reporting by lucy craymer editing by chris reese sandra maler and tom hogue