Data Snapshot: Wage Price Index - Holding at Low Altitude

 

The key points in this report are:

 

  • Wages are continuing to grow at a benign pace. In the March quarter, the wage price index lifted 0.5%, which was below the consensus and our estimate for growth of 0.6%. The annual pace however, was in line with expectations at 2.3%, unchanged for three consecutive quarters.
  • Wage growth in the quarter was weighed down by soft growth in public sector wages, which rose 0.4%. It was the weakest quarterly rise since the series began in 1997.
  • Private sector wages grew 0.5% in March quarter. On an annual basis, private sector wages picked up from 2.3% in the December quarter to 2.4% in the March quarter. While it remains a soft pace of growth, it was the strongest annual pace since late 2014.
  • Annual wage growth eased in industries which have faced the largest job losses over the past year. These industries include manufacturing, construction and retail.  There were however, industries with a noticeable pick up in wage growth. These included mining, professional scientific & technical services and healthcare & social assistance.
  • As a trend, the unemployment rate has held steady at 5.0% over the past five months, but we are expecting a moderation in labour market conditions. Given this outlook, it would seem unlikely for wage growth to pick up substantially. It suggests inflation will remain low for some time.

Please see the attached report for more information.



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