Wage Price Index - Slow Progress

• The wage price index rose by 0.6% in the September quarter, which was in line with both our own and consensus expectations. This followed an increase of 0.5% in the June quarter. 

 

• The annual rate of wage growth rose to three-year high of 2.3% in the September quarter, up from 2.1% in the June quarter.

 

• Real wages growth, taking into account inflation, also lifted slightly in the September quarter. Annual wages growth increased to 2.3%, from 2.1% in the June quarter. Meanwhile annual headline inflation fell to 1.9% in the September quarter, from 2.1% in the June quarter.

 

• Despite the small lift in the annual pace of wages growth, wages growth remains low. Taken together with high household debt and the slowdown in the housing market, slow wages growth suggests consumers are likely to remain reticent about spending. Ongoing slow wages growth and low inflation leave us comfortable with our expectation that the RBA will leave rates on hold for some time.

 

• In other data today, Westpac-MI consumer sentiment rose 2.8% in November. The index remained above 100, where it has been for the past 12 months, signalling more consumers are optimistic than pessimistic.

 

 

Please see the attached report for more information.

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