Real wages flounder
The Fair Work Commission annual wage award this year at an increase of 3½ per cent was lower than the prior year award increase of 3¾ per cent, broadly reflective of where wages price growth is heading.
In the September quarter, total wage price growth was a bit slower than expected at just 0.77 per cent for the quarter, and 3.4 per cent over the year.
The quarterly increase was far short of the 1.3 per cent headline increase in consumer prices in the September 2025 quarter, thus pushing real wages lower.
It's not a great surprise that private sector wages growth was considerably weaker (0.71 per cent) than the public sector increase (0.88 per cent), although there are some early signs that the pace of public sector wages growth may also now have peaked.
Over the year, private sector wage price growth slowed to 3.2 per cent, to be at the lowest level since the June 2022 quarter, with the trend pointing to a further slowdown ahead.
Wages in Canberra - where the public sector dominates - are still pushing ahead (3.9 per cent over the year), and the Western Australia resources cycle is still firing (4 per cent).
However, wage price growth was far more modest in New South Wales (3.3 per cent) and Victoria (3.3 per cent).
Wages growth in Queensland was 3.4 per cent over the year to September, while the Sunshine State recorded the fastest rate of private sector wages growth at 3.7 per cent.
By sector, the weakest wages growth appears to be in finance and insurance services, as firms look to cut headcount and offshore more roles.
The wrap
Overall, the increase in public sector wage prices masks an underlying softening in private sector wages.
Although not a big market mover, there's a suggestion here that - while some trades are in short supply - there's increasingly more spare capacity in other areas of the private sector labour market.
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