The Wage Price Index advanced an annual 3.5% in the three months through September, compared with 4.1% in the prior period and economists’ estimate of 3.6%. — Reuters
CANBERRA: Australia’s wage growth slowed in the third quarter, reflecting an easing in price pressures across the economy and reinforcing expectations that the next move in interest rates will be down.
The Wage Price Index advanced an annual 3.5% in the three months through September, compared with 4.1% in the prior period and economists’ estimate of 3.6%, Australian Bureau of Statistics (ABS) data showed yesterday.
On a quarterly basis, wages grew 0.8%, slightly lower than forecast.
The annual figure slid below 4% for the first time since mid-2023, said ABS prices statistics head Michelle Marquardt.
The annual gain in private sector wages was the lowest since the third quarter of 2022, she added.
The report validates the Reserve Bank of Australia’s (RBA) estimate that wage growth has now peaked.
Moreover, its latest forecasts show pay gains further slowing to 3.4% in the final quarter of this year and 3.2% by late 2025.
The RBA’s board is closely monitoring price-setting behaviour and the labour market, with employment data out today expected to show the jobless rate held steady at 4.1% in October.
“We expect wage increases to narrow through the remainder of 2024 and into 2025 as growth remains subdued and the unemployment rate rises,” said economist James McIntyre.
Previously, RBA officials stated that wage growth of around 4% is consistent with the central bank’s 2% to 3% inflation target provided the economy’s productivity performance improves.
Yet they’ve sounded increasingly concerned about that of late as there has been little sign of a return to solid productivity gains.
Furthermore, public sector wages grew 3.7%, outpacing those in the private sector on an annual basis, the ABS said. — Bloomberg
