Australia’s wage growth likely to have risen marginally in Q3

Australia’s monthly jobless rate had peaked in July 2015 and has since fallen by 0.7 percentage points. In quarter-on-quarter terms, the turning point was in the first quarter of 2015. However, wage growth is yet to show any sign of a rebound. But on the other hand, nominal wage growth has continued to drop, reaching the lowest rate of growth since the beginning of the current series in the first two quarters of the year at 2.1 percent year-on-year, noted Societe Generale in a research note.

In the first quarter, there was a ray of hope as the wage price index including bonuses seemed to have recovered; however, it was more than reversed in the second quarter.

“Our forecast is for a slightly stronger quarterly gain of 0.6%, but this would merely stabilise the annual rate”, added Societe Generale.

However, the implications for consumer spending power are not severe. In spite of the rebound in inflation in the September quarter to 1.3 percent, the consumer price inflation-adjusted wage growth is expected to still come in at 0.8 percent year-on-year, which is marginally above the 0.7 percent long-term growth rate.