Ekonomické zprávy
15.05.2024

Wage growth in Australia slowed more than forecast in the 1st quarter

Data released by the Australian Bureau of Statistics (ABS) showed that wage growth slowed in the first quarter after reaching a 15-year high in the fourth quarter of 2023. Overall, the data reinforced expectations that wage demand is peaking, supporting a gradual moderation of inflation pressures over the coming year. The slowdown in wage growth should also ease pressure for a further rate rise from the Reserve Bank of Australia (RBA). Markets imply little chance of a rate cut until April 2025, with around an 8% risk of one more hike later this year.

According to the report, the wage price index rose by 0.8% after an increase of 1.0% in the 4th quarter (revised from +0.9%). This was the weakest growth since the end of 2022. Economists had expected an increase of 0.9%. In annual terms, wage growth slowed to 4.1% from 4.2%, while economists expected the figure to remain unchanged. Growth in the private sector also dipped to 4.1%, its first fall since the third quarter of 2020. Wages in the public sector increased by 0.5% QoQ and by 3.8% per annum (compared with +4.3% per annum in the 4th quarter). Experts said that despite the slowdown, wage growth rates still exceed the inflation rate (3.6%), a welcome return to real pay growth after years of negative outcomes.

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