Wages growth lowest on record (members)

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ScreenHunter_04 Feb. 08 21.40

The Australian Bureau of Statistics (ABS) has just released its Wage Price Index for the June quarter of 2014, which revealed a continuation of soft wages growth across the economy, with annual wages growth also tracking at the lowest rate in the series’ 16-year history (see below charts).

ScreenHunter_3743 Aug. 13 11.44
ScreenHunter_3744 Aug. 13 11.44
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According to the ABS, wages grew by 0.6% (both s.a. and trend) in the June quarter, in line with analyst’s expectations. Private sector wages grew by just 0.6% (both s.a. and trend) over the quarter, whereas public sector wages grew by 0.6% (s.a.) and 0.8% (trend). Over the year, total wages grew by 2.6% (s.a.) and 2.6% (trend), with the private sector experiencing 2.4% (s.a.) and 2.5% (trend) growth and the public sector 2.8% growth (s.a.) and 3.0% growth (trend).

You can see from the next chart, which plots non-seasonally adjusted wages growth on a 6-month moving average basis (in order to reduce volatility), that wages growth has softened pretty much everywhere:

ScreenHunter_3745 Aug. 13 11.47
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.