Q1 WPI In Line With RBA, Share Of Large Wage Gains Rises Further

The Q1 wage price index rose a less-than-expected 0.8% q/q to be up 4.1% y/y, the third straight quarter above 4%. Q4 was revised up 0.1pp to 1.0% q/q. The RBA had expected 4.2% y/y and so the result is broadly in line with its forecast and so this data is unlikely to change the current on hold stance.

• The public and private sectors saw wage growth ease rising 0.8% q/q and 0.5% respectively, both the lowest since Q1 2022. They are now up 4.1% and 3.8% y/y down from 4.2% and 4.3% in Q4. The public sector is heavily impacted by the timing of new agreements and wage cap changes and there were large increases in Q3 and Q4 last year.
• The share of employees receiving a pay hike in Q1 eased to 14% from 19% in Q1 2023 with the average rise 4%. In the private sector 12% had an increase down from 14% in Q1 2023 but the size remained at 4.4% around where it has been every quarter since then except Q3 which was impacted by the minimum wage hike.
• The share receiving a wage increase above 3% over the last year rose to 66% from 50% in Q1 2023. A rise of 0-2% picked up slightly for the first time since Q2 2021 but is still 4.1pp below Q1 2023. The share receiving large gains of over 6% continued to trend higher in Q1 at 14.4% up 3.8pp y/y and 4-6% at 31% up 6.5pp y/y.