theguardian.com
Australian Wages Outpace Inflation
Australian wages grew faster than inflation for the fourth consecutive quarter, easing cost-of-living pressures but prompting the RBA to monitor for inflationary risks.
English
United Kingdom
EconomyLabour MarketInflationAustraliaInterest RatesIndo PacificWages
Australian Bureau Of Statistics (Abs)Reserve Bank Of Australia (Rba)National Australia Bank
Michelle Marquardt
- How did the Fair Work Commission's Annual Wage Review decision impact wage rises?
- The Fair Work Commission's Annual Wage Review decision in July 2024, resulting in a 3.75% wage increase, influenced wage rises. This is two percentage points lower compared to the same period in 2023. The proportion of jobs reporting wage changes remained consistent at about 45%, while the average size of hourly wage changes decreased from 5.4% to 3.7%.
- What does National Australia Bank's business survey indicate about labor cost growth?
- National Australia Bank's business survey indicates that labor cost growth is slowing, falling from 1.9% to 1.4% quarterly. The RBA is likely pleased with the easing wage increases, though slower than headline inflation. Employer-worker agreements make wage increases a lagging indicator, especially with low unemployment.
- What was the annual rate of increase in Australia's wage price index in the September quarter?
- Australia's wage price index (WPI) rose 3.5% annually in the September quarter, exceeding inflation (2.8%) for the fourth consecutive quarter. This provides relief to households struggling with the cost of living, although the increase is lower than the previous quarter's 4.1%.
- How did the wage price increases in the public and private sectors compare in the September quarter?
- Both the public and private sectors saw easing wage price increases. Public sector wages rose 3.7%, while private sector wages increased by 3.5%, marking a year of inflation-adjusted rises. This, however, only partially offsets losses from when prices surged faster than wages in late 2022 and early 2023.
- What is the Reserve Bank of Australia's concern regarding wage increases, and how does this relate to interest rates?
- The Reserve Bank of Australia (RBA) aims to prevent real wage increases from fueling further inflation, which could necessitate prolonged high interest rates. Before the latest data, investors anticipated an interest rate cut by July. The recent data suggests a rate cut might not be immediate.