Australian wage growth badly misses expectations

Australian wage growth missed economists’ expectations in the March quarter of 2022, according to new data released today by the Australian Bureau of Statistics (ABS).

Australian wage growth

Total wages grew by only 0.65% in the March quarter, missing analyst’s expectations of 0.8% growth. Private sector wages grew by 0.65% over the quarter, whereas public sector wages grew by 0.56%.

Overall wages grew by 2.35% over the year, up significantly from the all-time low of 1.36% recorded in the year to September 2020. But it too missed analysts expectations of 2.5% annual growth.

The private sector recorded wage growth of 2.44% in the year to March, whereas the public service recorded 2.23% wage growth:

Wage growth by sector

Wage growth has universally rebounded across Australia’s jurisdictions. Across the major states, wage growth is strongest in QLD (2.5%) and weakest in WA and SA (+2.2%):

Wage prices by state

Wage growth has also rebounded across most industries:

Wage growth by industry

Clearly, the softer than expected wage growth augers against the RBA hiking rates aggressively next month.

Unconventional Economist

Comments

  1. C.M.BurnsMEMBER

    they will raise by 25 bps next month. their minutes from last week (released yesterday) couldn’t be more clear about it.

      • Grand Funk RailroadMEMBER

        I reckon more flatlining wages may have them slap the IR gun back in the holster, abd try and nudge the ALP [if it is to be] into some spending and structural reform…….

        And my hot tip of the day is for the touting of more WfH as a household savings pitch

      • The RBA indicated no rate rise for May yet they still did and even greater than expected.

  2. BabundaMEMBER

    Australian wage growth missed economists’ expectations in the March quarter of 2022

    Not all of them.

  3. Good thing for ScoMo that he got in early and said that governments can’t influence pay rises.

    So this pile of poo isn’t his fault either.

  4. DrBob127MEMBER

    “The private sector recorded wage growth of 2.44% in the year to March, whereas the public service recorded 2.23% wage growth:”
    so much for your public-servants-with-their-snouts-in-the-trough rubbish you like to promote

    • “……so much for your public-servants-with-their-snouts-in-the-trough rubbish you like to promote”

      Yep, unless maybe for the “mandarins”. My experience in most PS positions are nowhere as highly paid compared to the private sector.

  5. Tassie TomMEMBER

    Bond yields have hardly moved on the news. I thought they might have dropped a bit more than the 5 bps that the 3 year bond yield has dropped. You can’t even tell where 11:30 is on the 1 year bond yield chart.

  6. AndynycMEMBER

    I would have thought with the restrictions on immigration and pump priming from the government during the pandemic that we should see a much bigger rebound no?

    • This data is only 5 months after NSW’s and VIC’s hard lockdowns. Plus the compulsory super guarantee was lifted 0.5% last June, which according to RBA and Grattan modelling would reduce wage growth by 0.4%.

      Lower immigration is helping to lift wages. But there is a lot of inertia in the system. This includes enterprise agreements that lock in predetermined pay rates for years.