The price of labour in Australia rose 0.8% in the September quarter in seasonally-adjusted terms, bringing the annual increase to 3.5%, according to the Australian Bureau of Statistics (ABS).
ABS statistics showed this continued a fall in annual wage growth underway since the December 2023 quarter, when the price of labour rose 4.3% year on year.
The ABS said it was the lowest annual rise in the wage price index (WPI) since the December quarter of 2022 and followed four consecutive quarters of annual growth of 4% of more.
Private and public sector wages each grew 0.8% seasonally-adjusted, which was lower than in the September quarter of 2023 (1.4% and 1.0% respectively).
The ABS’ Head of Prices Statistics Michelle Marquardt said wage rises for many jobs could be directly or indirectly linked to the outcomes of the Fair Work Commission Annual Wage Review decision.
In a media release, Marquardt said the latest decision of a 3.75% wage increase from 1 July 2024 was lower than the September quarter 2023 increase of 5.75% and the Commission’s September quarter 2022 awarded increase of 4.6%-5.2%.
Goldman Sachs said the deceleration in private-sector wages growth continued to support its view that the Reserve Bank of Australia (RBA) would start cutting interest rates in February 2025.
In a research note, the investment bank said wage growth was below its forecasts of 0.9% (quarterly) and 3.6% (annual) for the September quarter.
Goldman Sachs said an 0.8% rise in the WPI next quarter would bring the annual rate down to 3.2%, which was 20 and 60 basis points below the RBA’s Statement on Monetary Policy (SMP) forecasts in November and May 2024 respectively.