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The Australian Bureau of Statistics (ABS) has released its latest data on wage increases in the country for the June quarter, revealing that growth remained at 0.8 per cent for the third quarter in a row.
This comes as a surprise to Oxford Economics’ Head of Macroeconomic Forecasting Sean Langcake.
“Wage growth has been stuck at 0.8 per cent quarter-on-quarter for the past three quarters – a somewhat surprisingly slow pace given the very low level of the unemployment rate,” he said.
“Public sector wage growth lagged the private sector in Q2, with recent strength in EBA agreements running out of some steam.”
That lag was fairly insignificant – 0.8 per cent growth for the private sector versus 0.7 per cent for the public sector – but Mr Langcake expects Q3 to be a different story.
Q3 to have more in store as minimum boost hits
“Indeed, award wages made no contribution to growth in Q2 across both public and private sectors. [But] Q3 will see much faster growth with the recent minimum wage increase coming into effect in Q3,” he said.
City Index Senior Market Analyst Matt Simpson said he believes the wage price data could indicate the RBA is done hiking.
“Wages came in softer than expected, and as they’re already trailing inflation by quite some measure it adds to the case that the RBA are done hiking,” he said.
Mr Langcake agreed that the data did not immediately point to another rate hike in September, but did say the outlook for unit labour costs “remains concerning.”
Annual growth of 3.6pc
Despite a stubborn 0.8 per cent figure remaining the quo for three quarters straight, today’s data still adds up to annual wage growth of 3.6 per cent.
ABS Head of Price Statistics Michelle Marquardt noted June quarter salary reviews were higher than this time last year. The cost of living situation was identified as a driver.
“Wage rises from regular June quarter salary reviews were higher than in the same period last year, as recent cost of living and labour market pressures were incorporated into organisation-wide decisions on wages,” she said.
Higher raises, but less overall
The ABS highlighted that the growth rate remains comparable to the growth last clocked in 2012.
However, while increases received were higher in the inflationary environment – there were actually fewer than there were in 2022.
“Compared to a year ago, fewer jobs had wage increases this quarter, however, on average, the increases received were higher,” Ms Marquardt said.
