Employment Hero’s measure of activity across 150,000 small- and medium-sized businesses has revealed that wages fell in November, with healthcare, IT, manufacturing and logistical businesses all recording falls of at least 0.4%.
Employment Hero CEO Ben Thompson says that the Reserve Bank of Australia (RBA) needs to halt interest rate increases for at least the near term, given the economy appears to have reached a turning point and its data is showing that wage growth is flattening to align with inflation.
He also says that small- and medium-sized enterprises will likely cut back on staff and growth plans in the middle of 2024 as the economy potentially enters a small recession.
The result comes as Westpac’s measure of card activity plunged by 5.9 points over the fortnight to December 9, unwinding all of the gains delivered by last month’s Black Friday sales bonanza.
Westpac’s index of card activity is now at its second lowest level since July 2022.
“The Index is showing a clearer loss of momentum. Even with the Black Friday boost, the quarterly pace of growth has almost stalled flat in early December”, Westpac said.
Meanwhile, consumer sentiment remains at recessionary levels:
Wage growth will inevitably fall in 2024 given Australia’s unemployment rate is rising and is forecast to hit 4.5% by mid next year and possibly 5% by the end of the year.
SEEK’s job applications data is quickly falling back to pre-pandemic levels:
SEEK’s application per job ads data has also risen well above pre-pandemic levels, reflecting both softening demand and surging labour supply:
With Australia’s labour market softening amid falling economic growth and surging labour supply, wage growth is going to fall.
