Via Damien Boey at Credit Suisse:
In an article last year (“Desperately seeking wage inflation”, dated 20 February 2018), we introduced our proprietary wage tracker. Using data from the NAB business survey on labour costs, wage claims from enterprise bargaining agreements (EBAs), and male full-time equivalent employment as a share of the “active” labour force, we are able to predict more than 40% of the quarterly variation in the wage price index ahead of time.
…if we update the tracker components for 1Q 2019, we find that the labour market has loosened a little, while NAB survey labour cost inflation has moderated. Indeed, based on the monthly NAB survey data, labour cost inflation has slowed quite sharply. Therefore, wage inflation is likely to have softened in 1Q, consistent with 4Q marking the peak.
