Australia: Wage growth slows – ANZ

Catherine Birch, senior economist at ANZ, notes that Australia’s wage price index (WPI) rose by 0.5% q/q in Q3 2019, slowing annual growth to 2.2%.

Key Quotes

“The WPI rose by 0.5% q/q and 2.2% y/y in Q3. The Q2 result was revised down from 0.6% q/q to 0.5% q/q.”

“The private sector maintained quarterly growth at 0.5%, but this wasn’t enough to prevent annual growth slipping to 2.2%, down from 2.4% in Q1. However, including bonuses, private sector wage growth jumped to 2.9% y/y. This effectively reversed the prior quarter’s fall, and we don’t think it points to an upward shift in wage outcomes.”

“Public sector wage growth dropped back to 0.5% q/q. This followed a very strong 0.8% q/q result in Q2, which was inflated by a significant, one-off increase for Victorian public sector nurses and midwives to achieve parity with New South Wales. Annual growth in public wages slowed to 2.5%.”

“Most industries saw annual wage growth slow in Q3, with the largest decline in other services (-0.4ppt). Transport (+0.2ppt) and professional services (+0.1ppt) were among the few that saw improvement. Annual wage growth in construction and retail was unchanged during the quarter.”