Australia’s Wage Growth Accelerates to 3.4% on Tight Jobs Market
Australia’s wage growth was stronger than expected in the first three months of the year, highlighting the nation’s tight labor market that has been underpinned by a wave of public-sector hiring.
The Wage Price Index advanced an annual 3.4% in the first quarter, exceeding economists’ estimate and the prior reading of 3.2%, Australian Bureau of Statistics data showed Wednesday. On a quarterly basis, wages grew 0.9%, higher than the 0.8% forecast.
“Annual wage growth ticked up for the first time since the June quarter 2024,” said Michelle Marquardt, ABS head of prices statistics. The report showed public sector wage growth was higher than the private sector.
The Reserve Bank is closely monitoring the price-setting behavior of firms and the labor market, with employment data on Thursday expected to show the jobless rate held at 4.1% in April.
These data will feed into the RBA’s quarterly update of its economic forecasts that will be released alongside its interest-rate decision on Tuesday. The central bank’s outlook in February predicted unemployment would peak at 4.2% this year while wages growth would hit 3.4% — the figure shown today — before easing back to 3.2%.
Economists and money markets anticipate the RBA will cut by a quarter-percentage point on May 20 to take the cash rate to a two-year low of 3.85%.
Source: Bloomberg
