Goldman Sachs note that “Australia's Wage Price Index (ex. bonuses) increased +0.65% Q/Q in Q122, softer than expected. Annual growth picked up 10bp to 2.4% Y/Y. Compositionally, private-sector wages growth remained steady at 0.7% Q/Q (+2.38% Y/Y) while public-sector wages growth picked up +0.7% Q/Q (+2.10% Y/Y). Wages growth across sectors was mixed, featuring a slight pick up in professional services and construction but ongoing surprisingly soft wages growth in mining (+1.8% Y/Y) - despite very strong signals of labour cost pressures from alternative indicators. Overall, today's downside surprise reduces the likelihood of a 50bp RBA hike at the June meeting as we expect, although we think tomorrow's labour force statistics are more important for the RBA's reaction function than the WPI at this point.”
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