Wages slowing
Wages growth was weaker than expected in the June 2024 quarter, slowing from 0.87 per cent in Q1 to 0.80 per cent in Q2.
This was slower than the headline rate of inflation, which will represent yet a further reduction in consumer spending power.
Over the year wage price growth slowed from 4.09 per cent to 4.05 per cent after some modest revisions.
Notably private sector wages growth was very weak at only 0.73 per cent (versus 0.85 per cent for the public sector).
Wages growth was strongest over the year in Tasmania at 5.1 per cent, but Tassie only has a small weighting in the index.
Wages growth was weak in New South Wales and Victoria over the quarter at only 0.5 per cent, with annual wage price growth in Victoria slowing to just 3.3 per cent.
Overall, it was a softer than expected set of numbers in this release, and a further endorsement that policy settings are cooling the economy as expected.
The most recent numbers are what's important.
Many consumers with a mortgage are already feeling the pinch, and wages growth below inflation will add to those pressures.
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The NAB Survey for July showed a decline in business confidence, and showed ongoing improvement in price indicators.
Shane Oliver of AMP put them into graph form here:
Source; Shane Oliver, NAB Survey data
The apparent jump in labour costs related to the minimum wage and award wages increase in the quarter, but in contrast purchase cost inflation eased to just 1.1. per cent.
The US Producer Price Index increased by only +0.1 per cent in July, taking the annual reading down more than expected from +2.6 per cent to +2.2 per cent.
This paves the way for another likely soft consumer price inflation print this month, and bond yields fell accordingly.
The US 2-year bond yield sunk to around the lows for the year, while Australia's 3-year bond yield fell to around 3½ per cent.
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