Wage growth in Australia hits decade high
Wages in Australia grew by slightly more than expected in comparison to the first four months of 2022, the largest recorded growth in a decade.
According to the Australian Bureau of Statistics (ABS), the wage price index rose 0.8% in the March quarter from the previous quarter, just under forecasts of a 0.9% increase. The annual pay growth, however, accelerated to 3.7% from a revised 3.4% the previous quarter, which was higher than the forecasts of 3.6%.
Investors responded by pushing the Australian dollar down to AU$0.6645 (US$0.44), with a predicted higher chance of a move in August or September. The annual wage growth is expected to hit 4.0% at its highest at the end of this year before easing back to 3.7% by mid-2025.
Economists are also keeping an eye on the Australian government’s decision to raise the minimum wage this year, taking note if the rise would match inflation, as it would impact on the Reserve Bank of Australia’s (RBA) efforts to manage inflation.
The government has already announced a 15% pay increase for aged care workers, with ABS data showing that wages in the public sector rose to an annual rise of 3.0%, while private sector wages increased by 3.8%, reported Reuters.