Australia’s March quarter wage price index (WPI) is about to be released, a report that measures changes in hourly wage and salary rates for Australian workers.
It’s influential, even if it doesn’t generate the same levels of market volatility as other domestic data releases.
Both the RBA and federal government expect the recent deceleration in wage growth — leaving it sitting at the lowest level on record — will reverse in the years ahead, helping to boost inflationary pressures and taxation revenues as a consequence.
However, given a less than stellar track record in forecasting wage growth in recent years, and given the ramifications for the Australian economy should a rebound not take place, it ensures that there’ll be interest on the report when it is released later today, especially when real wage growth — adjusted for inflation — is expected to be negative.
Here’s the state of play:
- In the December quarter last year, the WPI excluding bonuses grew by 0.48% in seasonally adjusted terms, leaving the annual rate at 1.87%.
- The year-on-year increase was the lowest level on record, narrowly surpassing the 1.88% rate reported in the previous quarter.
- Private sector wage grew by just 0.4% — the second-lowest quarterly increase on record — leaving the annual rate at 1.8%, below the 1.89% pace of the September quarter. Like the headline rate, it too was the lowest rate on record going back to when the series began in 1997
- According to the ABS, private sector wages in New South Wales grew at the fastest pace during the quarter, increasing 0.4% in original terms. Those in Western Australia grew by a paltry 0.1%, the lowest of all states and territories.
- Public sector workers fared better than their private-sector peers, recording a quarterly increase of 0.55%. That left the year-on-year increase at 2.25%, again a record low.
- Wages for public servants in Queensland recorded the highest increase of all states and territories during the quarter at 1.3%. At the other end of the spectrum, those in New South Wales grew by just 0.2%, the lowest across the country.
- By industry, the ABS said that annual wage growth ranged from 1% for mining to 2.4% for health care and social assistance and education and training workers.
- Today, economists expect the WPI to increase by 0.5%, leaving the year-on-year rate unchanged at 1.9%.
- Given headline consumer price inflation (CPI) currently sits at 2.1%, such an outcome would mean that real wage growth went backwards over the past year.
The report will be released at 11.30am AEST.
Business Insider will have all of the details once it hits the screens.