Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Wednesday, 1 August 2018

COLI exceeds wages growth

Squeezed!

The cost of living increase for employee households picked up to 2.3 per cent at the end of FY2018.

This was slightly ahead of the growth in the wage price index over the year to March (before bonuses at any rate). 


This shortfall will cause a few ripples of excitement! 

Fortunately the main contributors to the change were oil prices (i.e. passed through to auto fuel prices at the bowser) - which have fallen quite sharply since 1 July - and the tobacco excise effective 1 March.

Unfortunately there was also a further increase in healthcare costs, which makes a doubly good argument for not taking up smoking.

On the plus side, good news for cyclists - or at least those that don't get injured. 

The wage price index has also now likely bottomed and will almost certainly improve from here. 

Nevertheless, this was a mildly troubling release that doesn't add much to the case for rate hikes.