Wages growth softened as expected in the September quarter, offering some insight into why household consumption remains so sluggish.
Total hourly rates of pay, excluding bonuses, rose by a seasonally adjusted 0.5 per cent in the three months to September 30, compared to 0.6 per cent three months earlier.
Annual wage growth slowed to 2.2 per cent, according to Wednesday’s figures from the Australian Bureau of Statistics, in line with a predicted dip from 2.3 per cent at the end of the previous quarter.
Public sector annual wage growth of 2.5 per cent continues to outstrip private sector growth of 2.2 per cent, with wages for both sectors expanding by 0.5 per cent over the three-month period.
ABS chief economist Bruce Hockman said the largest contribution to wage growth over the quarter was jobs in the healthcare and social assistance industry.
Victoria recorded the highest through the year growth of 2.8 per cent, while WA recorded the lowest of 1.6 per cent for the fifth consecutive quarter.
Wednesday’s figures come after the Reserve Bank on Friday downgraded its outlook for annual wages growth from 2.3 per cent to 2.2 per cent through to December.
The central bank believes wages growth will now return to 2.3 per cent by the end of 2021.
The Australian dollar dipped in the 15 minutes after the Wage Price Index figures were released, slipping from 68.37 US cents to 68.32 US cents by 1146 AEST.
-AAP
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