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Catherine Birch, an Analyst at Australia and New Zealand (ANZ) Banking Group, offers a quick reaction to the Australian Q2 Wage Price Index released earlier this Wednesday.

Key Quotes:

“The wage price index (WPI) rose by 0.6% q/q in the June quarter, maintaining annual growth at 2.3% for the fourth consecutive quarter.

The “most significant contribution” to quarterly growth came from public sector health, where ABS Chief Economist, Bruce Hockman, said that “a number of large increases were recorded in Victoria under a plan to ensure wage parity with other states”.

This temporary effect boosted public sector wage growth to 2.6% y/y, but this was largely offset by a decline in private sector wage growth to 2.3% y/y.

So the headline figure – which isn’t very positive in itself – masks some more concerning trends.”