AUSTRALIA DATA: Q4 Wage Data Show Easing Pressures

The Q4 wage price index (WPI) rose 0.7% q/q and 3.2% y/y down from the upwardly-revised Q3 0.9% q/q & 3.6% y/y. Q4 was in line with yesterday’s updated RBA forecasts and its statement that “wage pressures have eased”. The quarterly increase in Q4 was 0.1pp below consensus and the lowest since Q1 2022. However, with productivity growth falling, the RBA pointed out that unit labour costs remain elevated.

• Q4 was a low 0.7% q/q printing at 0.65%. The moderation was predominantly driven by the public sector which tends to be dominated by enterprise agreements. Public sector wages rose 0.6% q/q down from 0.8% in Q3 and 1.4% in Q4 2023. They are now up 2.8% y/y, the lowest since Q4 2022.
• Private sector wages only moderated slightly from 0.8% q/q & 3.5% y/y to 0.7% & 3.3% y/y in Q4. This was still the lowest annual growth since Q2 2022.
• While the labour market remains tight with the RBA observing that it has “tightened a little further in late 2024”, it appears not to be reflected in wage growth. The ABS notes though that “individual arrangements”, which tend to reflect labour market conditions, accounted for less of the increase in Q4 2024 than previous Q4s. SEEK advertised salaries are moderating though with Q4 averaging 3.6% y/y growth down from 4.0% in Q3.
• 14% of private sector jobs received a wage increase in Q4 2024 down 2pp from Q4 2023 and the size also moderated to 3.7% from 4.4%

Australia wages ex bonuses y/y%