Wage growth remains benign in Australia – Westpac

FXStreet (Barcelona) - Justin Smirk, Senior Economist at Westpac highlights that the Australian Q3 Wage price came in on the market’s expectations and observes a weak industrial wage growth.

Key Quotes

“The Q3 Wage Price Index came in on the market’s expectations, printing at 0.6%qtr. Annual growth was flat at 2.6%yr (2.58%yr vs. 2.59% in Q2 and 2.70% in Q1) holding a record low for the series which dates back to Q3 1997.”

“Industry data highlights that, while certain sectors have had a marked deceleration in wage growth, all industries are currently experiencing soft (or weak) wage growth. The strongest sector, arts & recreation, recorded wage growth of just 3.6%yr.”

“The heat has definitely come out of public sector wages. Following two strong quarters in late 2013/early 2014 (0.8% in Q4 2013 Q1 2014), public wages increased by a more modest 0.6%qtr in Q2 and then 0.5%qtr in Q3. The annual pace public sector wage growth slowed to 2.7%yr well below Q2 2012’s 3.3%yr result.”

“Private sector wage growth is holding at 0.6%qtr (the quarterly average for the last year and a half is 0.61%qtr). Annual private sector wage growth is still softer than the public sector running at 2.5%yr pace.”