The three-year erosion of actual wages has come to an finish with Australians’ pay packets now rising in keeping with inflation, however annual wages progress has fallen from its decade-high to three.6 per cent.
Despite near-record low unemployment, the Wage Price Index for the June quarter got here in at 0.8 per cent for the third quarter in a row, in line with recent figures launched by the Australian Bureau of Statistics.
In good news for debtors, the figures have been beneath the RBA’s official forecast of three.7 per cent, making any additional fee hikes more and more unlikely.
The index measures modifications in base wage charges however doesn’t embrace any extra hours labored, bonuses, extra time, promotions or altering jobs.
With headline inflation within the June quarter climbing by 0.8 per cent, this represents the primary time that quarterly wages numbers have saved up with value pressures in three years.
The recent figures have been weaker than anticipated. Economists forecast wages to develop by 0.9 per cent within the June quarter.
The proportion of jobs receiving a wage rise this quarter was barely decrease than in June quarter 2022. However, for these staff who did obtain a wage improve, the typical improve was bigger than final 12 months.
BetaShares chief economist David Bassanese mentioned it was fairly doubtless wages progress had already peaked.
“With economic growth and inflation moderating, hiring intentions easing and higher immigration helping fill labour market shortages, the pace of wage growth may well moderate in the quarters ahead,” he mentioned.
“As a result, it may well be the case that Australia may not need to push the unemployment rate up all that much to keep a lid on inflation in the coming year.”
Oxford Economics Australia head of macroeconomic forecasting Sean Langcake mentioned the weaker than anticipated consequence would doubtless spare households from future fee hikes.
“Having paused in August, we do not think these data alone will spur the RBA into another rate hike in September,” he mentioned.
“However, the outlook for unit labour costs remains concerning given the recent weak trend in productivity growth.”
In the minutes of its August 1 board assembly, the RBA famous that wages progress remained above ranges that will be per many central banks’ inflation targets.
“The forecasts were predicated on labour productivity growth returning to its pre-pandemic trend over coming years, which would be needed for the expected growth in labour costs to be consistent with the inflation target,” the minutes learn.
Economists anticipate the Fair Work Commission’s award and minimal pay determination will speed up wages progress sharply in September.
Originally printed as Fresh wages numbers weaker than anticipated as inflation bites
Source: www.dailytelegraph.com.au
