Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

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Thursday, 17 November 2016

Wages collapse!

Wages still outpacing prices

It was no real shock to see mining (+1 per cent) and construction (+1.7 per cent) wages growth dragging down the national averages.

These sectors were major drivers of the strong wages growth through the resources investment boom.

But now we're coming down the other side of the boom the opposite is true.

Elsewhere, wages generally grew by a bit above 2 per cent.

"Nothing but bad news"!

"Wages growth collapses below 2 per cent for the first time"!

The headlines were no surprise - and of course these days, clicks are paramount - but I can't agree.

Nothing is all bad, just as nothing is all good.

For example, if lower wages growth is a part of Australia's adjustment to the post-mining boom environment then it may not just be beneficial, it may be downright essential.

Of course, higher wages growth is great if it's you that's getting the higher wages, but sometimes it's better that people aren't left unemployed.

One plus is that lower wages growth can mean less inequality between professions and industry sectors.

Lower wages growth has also encouraged employers to hire more staff.

The unemployment rate has fallen from 6.3 per cent to 5.6 per cent lately, although the October figures are due out today and may show that the seasonally adjusted unemployment rate is a notch higher (the monthly figures have been a tad volatile after all).

In any event, the inflation rate over the year to September was +1.3 per cent, so in real terms wages have continued to rise. 

Wages growth did dip a little below the rate of inflation for a few quarter through the financial crisis.

However, wages growth has outpaced inflation by 18 per cent over the past decade and a half.

Good for employers, good for consumers.