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.
“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.”