Australians’ wages have increased faster than inflation for a fourth quarter in a row, bringing some relief to households battling with cost of living pressures.
The wage price index rose at an annual rate of 3.5% in the September quarter, the Australian Bureau of Statistics said on Wednesday. That result compared with a pace of 3.6% expected by economists and the 4.1% rate reported by the ABS for the June quarter. Annual headline consumer inflation was 2.8% for the July-September period.
On a quarterly basis, the WPI was up 0.8%, compared with market expectations of a 0.9% increase and the June quarter’s 0.8% advance. Quarterly CPI was just 0.2%.
The widely expected wage increase for the September quarter marks a year of rises after adjusting for inflation. While welcome, the gain will only go part way to claw back some of the retreat when prices took off much faster than wages in late 2022 into 2023.
The Reserve Bank of Australia, too, will be keen that real wage increases don’t stoke inflation and mean interest rates have to stay high for longer. Prior to today’s data, investors weren’t fully pricing in a cut to the RBA’s cash rate until July.
NAB’s monthly business survey, released on Tuesday, though, found that labour cost growth has continued to ease, dropping from a quarterly pace of 1.9% in the three months to September to 1.4% in the three months to October.
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