Australian incomes take a terms-of-trade dump

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Monday’s December quarter Business Indicators release from the ABS, which feeds into today’s national accounts, showed that the gap between wages & salaries has narrowed against business profits.

As shown in the next chart, real business gross operating profits fell in the December quarter, down 1.2% in trend terms:

Therefore, while there remains a wide gulf between wages & salaries, the two series have begun to converge:

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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.