Tight labor markets in Australia are putting upward pressure on wages, but they are still lagging behind current inflation.
The Australian Bureau of Statistics (ABS) has revealed that: Wages increased by 2.3 percent In the past year, after accelerating to 0.7% in the December 2021 quarter.
Wages in both the public and private sectors rose 0.7% during the quarter.
Michelle Marquardt, head of price statistics for ABS, said annual income growth has continued to rise from a minimum of 1.4% in late 2020.
“The percentage of salary increases reported in the December quarter was higher than normally seen at this time of the year,” she said. “Wage pressure on jobs with specific skills continued to rise over the December quarter.”
Innes Willox, CEO of the Australian Industrial Group, said wage growth has recovered to pre-pandemic levels and should help move towards full employment.
“Remember that the 2.3% annual increase in the wage price index is below the current inflation rate, but the wage price index does not include non-wage factors such as employer contributions to retirement pensions. Please, “he said.
Aging guarantees have increased by 0.5% since July 1, 2021, and need to be taken into account when comparing the wage index to the underlying inflation rate of 2.6%, Willox said.
ANZ economists said quarterly performance was strong, but it wasn’t enough to raise rates in June as the Reserve Bank of Australia (RBA) “is unlikely to be overly influenced by this.”
RBA Governor Philip Lowe hopes wage growth will be at least 3 percent before the first rate hike.
However, Gareth Aird, head of the Commonwealth Bank’s Australian economic sector, supports the June rate hike forecast.
“We are calling on the RBA to start raising cash rates in June,” he said. “Today’s data wasn’t as strong as we expected, but we expect it to be bright red. [March quarter] The underlying inflation rate [around] 3.4 percent. “
Air Do was also surprised by the slow growth in wages in some states where the blockade was less disruptive. For example, Victoria, which spent the longest time blocking the world, showed higher wage increases (2.3%) than Western Australia (2%).
Although December numbers were lower than expected, Aird expects the next wage index to further accelerate wage growth to 0.8%.
Retail wages were the largest quarterly increase in all industries, at 1.2%, the highest rate since September 2015.
In contrast, education and training recorded the lowest quarterly growth rate of 0.3%. ABS said it was affected by the expiration of several major corporate agreements.
On February 24th, ABS will release new figures for average weekly salary, salary role jobs and wages, and workforce data.