CS: Wages growth about to crumble

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Via the excellent Damien Boey at Credit Suisse:

We have updated our proprietary wage inflation tracker for the latest partial indicators – and the results suggest that we should look forward to 2% annualized wage inflation in the coming quarters – well short of the RBA’s desired 2.5% annualized.

Key components of our wage tracker include:

  1. Male full-time equivalent employment as a share of the “active” labour force – a measure of slack in the labour market.
  1. Labour cost inflation, as reported in the NAB business survey.
  1. Enterprise Bargaining Agreement (EBA) wage claims.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.