Cue the wage-inflation panic! Because the Australian Bureau of Statistics (ABS) has just released the Q3 wage price index (WPI), which rose 1.0% over the quarter to be 3.1% higher year-on-year:
The result beat analyst’s expectations of a 0.9% quarterly rise.
Wages across the private sector rose 1.2% over the quarter to be 3.4% higher over the year. Whereas public sector wages grew 0.6% over the quarter to be 2.4% higher year-on-year.
Commenting on the result, ABS Program Manager of Prices, Michelle Marquardt, noted:
“This is the highest quarterly growth in hourly wages recorded since March quarter 2012. In seasonally adjusted terms, this growth was primarily driven by increases in wages for the private sector which grew at twice the rate of wages in the public sector (1.2 per cent compared to 0.6 per cent).”
“Labour market pressures in the private sector combined with the largest Fair Work Commission award increase in more than a decade saw rises in both the size of average wage changes and the proportion of private sector jobs recording a wage change”.
This could be the high-water mark, however, given SEEK’s Advertised Salary Index has rolled over:
The explosion in temporary work and student visas should also kill wage pressures:
Nevertheless, the higher-than-expected WPI should add impetus to the RBA’s monetary tightening, assuming Thursday’s labour force data doesn’t come in soft.
