Wages underwhelm again
Wages growth was a disappointing 0.84 per cent over the March 2023 quarter, a little bit lower than market economist expectations of 0.9 per cent.
Over the year, wages growth was only 3.66 per cent, with the past two quarters revealing a slowly decelerating trend, and pointing to a 6-month annualised pace of only 3.4 per cent wages growth.
On the plus side, year-on-year wages growth of 3.66 per cent was, remarkably, the highest in a decade.
Public sector wages growth was only 2.95 per cent over the year, and really needs to go higher (thankfully it will).
Private sector wages growth was 3.83 per cent over the year, which was better, albeit still well below inflation, which will restrict consumer spending...especially given higher mortgage rates.
Western Australia and Tasmania had the higher rate of wage price growth over the year at 4.1 per cent.
The wrap
Overall, a slightly weaker result than already modest market expectations, with no evidence to be found of a price-wages spiral.
The strongest wages growth for the cycle was seen in the third quarter of 2022, and now we have population growth running at about 500,000 per annum, so that just about kills off any chance of accelerating wages from here.
We might see annual wage price growth peak at around 4 per cent, potentially, but not much more than that.
Detailed analysis from James Foster you can find here.
