Australian wage growth held steady in the June quarter while the pace of annual pay awards unexpectedly slowed, raising hopes that inflationary pressures are weakening and building the case against further increases in interest rates.
The data released by the Australian Bureau of Statistics on Tuesday showed the wage price index rose 0.8 percent in the June quarter from the previous quarter, against forecasts of a 0.9percent increase.
“Wage growth has been stuck at 0.8 percent quarter on quarter for the past three quarters – a somewhat surprisingly slow pace given the very low level of the unemployment rate,” said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia. The path involves annual wage growth peaking at 4.1 percent by the end of the year before easing back to 3.6 percent by end-2025, according to the bank’s latest forecasts.However, risk is wages in the third quarter could spike higher after a large mandated increase in the minimum and award wages, which could prompt the RBA to hike rates one last time by the end of the year. Currently, investors put that chance at above 50 percent.
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