The Westpac-Melbourne Institute Consumer Sentiment survey was released today (find full release below) and showed wage growth expectations had slowed, although more expected a rise in wages:
The results show a significant upgrade compared to September last year although this was mostly a shift from expecting base
wages and salaries to be unchanged or lower to expecting a ‘modest’ 0-4% increase range rather than more significant 4%+ gains.Some 58% of consumers expect their base wage to rise, up from exactly half in September and the highest reading since we first began surveying expectations in March 2010. However, the proportion expecting an increase of over 4% was up only slightly from 17% in September to 19% in March. The proportion expecting no change declined from 44% to 41% while those expecting wage falls dropped from 6% to 1%, and those expecting 8%+ gains was unchanged at 7%.
On a state by state basis, wage expectations were “muted” in NSW, compared to expected rises in Vic, Qld and WA all at new highs. Western Australia – the boom boom state amongst the Eastern squibs – had huge expectations for large rises in income. A permanently high plateau perhaps?
Westpac is estimating a trimmed mean wage expectation of 3.4% for the year, up from 3.2% in the September 2011 quarter and below the ABS wage inflation rate of 3.6% in 2011.