Minimum wage booster
Wage price growth was +1.3 per cent in the September quarter, as the outsized minimum wage increase and strong awards flowed through to the official data, equating to the highest quarterly growth for wage prices on record (across quarter of a century of data).
Over the year, wage price growth was +4 per cent, which was the highest annual result since March 2009.
Of course, there's a bit of catch-up happening here - two years earlier, for example, saw the lowest quarterly increase on record, at only +0.1 per cent growth.
This boost to wages was already known about months ago, and financial markets didn't even blink at the result, which was actually in line with market expectations.
At the state level, booming Queensland was the stand-out performer with +2.3 per cent quarterly growth taking annual wage price growth for the Sunshine State to +4.7 per cent.
Over the year private sector wages growth was +4.1 per cent...ahead of the public sector, which saw a +3.5 per cent uplift.
The wage price increases have been fairly modest overall given the extremely tight situation arising through the pandemic, increasing by +4 per cent over the past year, and well below the rate of inflation.
However, the extreme tightness in the labour market did allow more people to become employed, and many were also promoted to management positions.
Looking ahead, record immigration will now work to pull down wages growth again.
I honestly thought immigration would've slowed down by now, but new figures out this week showed net immigration still tracking at all-time record levels, even now...
This continues to imply net long-term immigration of around +500,000 into Australia over the past year.
Source: Shane Oliver, AMP Capital
This is becoming politically unpopular, and Roy Morgan Research polling released today saw confidence in the government collapsing to new lows, and the 2-party preferred polling dropping all the way back down to 50:50.
Source: Roy Morgan Research
Looking ahead, wage price growth in the next two quarters is expected to return to +0.8 per cent, which means that the peak for the cycle is for wages growth of +4 per cent (exactly in line with Reserve Bank forecasts).
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The UK inflation rate slowed from +6.7 per cent to +4.6 per cent in October, it was reported today.
At the peak the UK inflation rate was above +10 per cent!
Looking around the traps, things are generally moving in the right direction now.
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