| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Quarter over Quarter | 0.9% | 0.8% to 1.0% | 0.8% | 0.8% |
| Year over Year | 3.7% | 3.6% to 3.8% | 3.5% | 4.1% |
Highlights
Australia's wage price index rose 0.8 percent on the quarter in the three months to September, as id did in the three months to June, with year-over-year growth in the index slowing from 4.1 percent to 3.5 percent. This is the slowest year-over-year growth since late 2022. Monthly labour market data over that period showed ongoing low unemployment rates and participation rates close to record highs.
Today's data are in line with the assessment made by officials at the Reserve Bank of Australia in their most recent quarterly update published last week. they noted that wages growth is moderating but also cautioned that it is still too high relative to productivity growth and represents an upside risk to inflation. Officials left policy rates on hold again last week but stressed that policy"will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range".
Today's data are in line with the assessment made by officials at the Reserve Bank of Australia in their most recent quarterly update published last week. they noted that wages growth is moderating but also cautioned that it is still too high relative to productivity growth and represents an upside risk to inflation. Officials left policy rates on hold again last week but stressed that policy"will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range".
Market Consensus Before Announcement
Forecasters expect a 0.9 percent quarterly rise and a 3.7 percent increase on year in the third quarter, suggesting moderating wage pressures. WPI was up 0.8 percent and 4.1 percent in the prior quarter. It peaked at a 4.2 percent annual rate in the fourth quarter of 2023.
Definition
A measure of the price employers pay for labour due to market factors, specifically wages and salaries. Wages and salaries reflect payments in cash or kind that are made at regular intervals and include: piecework payments; enhanced or special allowances for working overtime or unsocial hours; regular supplementary allowances ; payments for employees away from work for short periods but not including absences for sickness or injury; and bonus and incentive payments.
Description
The wage price index is an easy way to evaluate wage trends and the risk of wage inflation. Officials at the Reserve Bank of Australia closely monitor wage inflation to assess the outlook for consumer prices and broader inflationary pressures. Wage pressures tend to strengthen when economic activity is booming and the demand for labor is rising rapidly. During economic downturns, wage pressures tend to be subdued because labor demand is down. By tracking labor costs, investors can gain a sense the outlook for inflation and monetary policy, with interest rates more likely to rise when wage inflation is high.
