Australia wage price index rose, below market expectations, posting the smallest quarterly increase since the series began in 1997. The annual rate fell to 2.1 pct in the year to the March quarter, which is also the lowest on record since 1997.
The easing of wage price index is followed by annual wages growth of 2.2 pct in the year to the December quarter. While wages growth is low, it is above the annual rate of headline inflation, which stood at 1.3 pct in the year to the March quarter, reports said.
The slow pace of wage growth points to spare capacity in the labor market and a greater degree of flexibility in setting wages, against a backdrop of low inflation globally. Ongoing low inflation and uncertainty about the outlook for global economic growth suggest another interest rate cut is on the cards, St. George Bank reported.
“We have a rate cut penciled in for August,” St. George Bank commented in a recent research piece.
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