Statistics New Zealand figures showed that the Labour Cost Index (LCI) and the Quarterly Employment Survey (QES) - the most closely watched wage indicators - were under market expectations.
Most notable was the LCI for the private sector all salary and wage rates, including overtime. The index rose 0.3% in the March quarter against market expectations of a 0.5% increase.
Mr Steel said that importantly for Reserve Bank watchers was the fact the 1.8% annual rise in the LCI undershot central bank expectations of a 2.1% rise.
''We are of the view that wage inflation will pick up into the year's end and accelerate in 2014 with the usual lags to the broader economic and employment improvement we see.''
In addition to anticipated further gains in asset prices, a forecast labour market improvement was an important aspect in thinking the official cash rate would start rising from March next year, he said.
But now was no time to get downbeat, according to Mr Steel. The general mix of wages and earnings data was not particularly low, especially compared with the consumer price index, the official measure of inflation.
The unadjusted private sector LCI - a better measure of nominal wages - rose 0.7% in the quarter to be up 3.3% on a year ago.
That implied ''decent real wage growth'' given inflation rose 0.9% over the same period.
Similarly, an even stronger message came from the 4.4% annual increase in total gross weekly earnings which could be thought of as the change in the total wage bill for employers, Mr Steel said.
''Real wage growth goes some way to explaining why consumers are confident.
''After all, it is not so much what you get paid but the purchasing power of that money. Yes, consumers tend to like low inflation. Consumers are spending more, although we think this morning's 5.9% annual increase in Paymark transactions in the year to April overstates the case.''
The underlying pace in consumer spending is something closer to 4%, he said.
Construction was a standout in yesterday's QES data, leading the charge across filled jobs and paid hours and posting above average wage growth.
Part of that reflected the increase of rebuilding in Canterbury. Filled jobs in Canterbury were up 6.8% on a year ago compared with 1.7% across the nation as a whole.
LCI annual wage growth in the Canterbury construction sector rose 4.3%.
However, there was little evidence of that spreading to other areas yet, with construction sector annual wage growth for the rest of New Zealand at 2.1%, Mr Steel said.
The QES job indicators increased the chance of a ''decent'' bounce back in tomorrow's Household Labour Force Survey.
