MNI BRIEF: Aussie Wages Stronger at 3.7% Y/Y

The seasonally adjusted wage price index rose 0.8% over the March quarter and 3.7% over the year, up from 3.6% recorded over Q4 2022 and beating expectations of a 3.6% rise, according to Australian Bureau of Statistics data released today.

Private sector wages increased 0.8% and the public sector gained 0.9%. “While the public sector recorded higher quarterly growth, the much larger size of the private sector meant it was the main driver of Australian wage growth,” the ABS stated. “Jobs covered by individual arrangement accounted for just over half of the recorded wage growth in March quarter 2023. A similar proportion of jobs covered by individual arrangements had a wage increase compared to the same quarter last year. However, there was higher growth for this group of jobs due to higher average wage increases, reflecting current labour market conditions.”

Following the RBA's May decision to hike rates 25bp to 3.85%, Governor Philip Lowe stressed the Reserve would protect employment gains as it fights inflation (see: MNI: RBA Inflation Strategy to Protect Labour Gains). The May minutes release Tuesday showed the board’s renewed determination to fight inflation and its focus on wages and employment as key inputs into its decision making (see: MNI: RBA Determined to Bring Inflation Down - May Minutes).