Soft wages figures have strengthened the prospect of an extended cash rate pause, economists say, as the Reserve Bank warns for the first time the exceptionally strong jobs market may be about to sour.
Seek chief executive Ian Narev said advertisements on the online jobs platform were down almost 20 per cent in the 12 months to July, with the decline in listings accelerating between April and June.Annual wages growth fell to 3.6 per cent in the June quarter from 3.7 per cent in the March quarter, the Australian Bureau of Statistics said on Tuesday, after a weaker-than-expected 0.8 per cent increase in the three months to June.
The wages figures were also lower than official RBA forecasts for quarterly growth of 0.9 per cent, and came despite public sector salaries growth accelerating to its fastest pace in a decade and private sector pay rises hitting new highs.Markets ascribe just a one in 10 chance the RBA will increase the cash rate to 4.35 per cent at outgoing governor Philip Lowe’s final board meeting on September 5, though they estimate a two in three chance of a move by February 2024.
However, ANZ chief economist Adam Boyton said 0.8 per cent appeared to be the current underlying rate of quarterly wages growth, despite a predicted one-off bounce in the September quarter. The June quarter marked the 12th consecutive quarterly decline in real wages, with pay growth falling short of the 0.9 per cent increase in the seasonally adjusted consumer price index.
About 12 per cent of private sector employees received pay rises in June, which was in line with the pre-pandemic average, but down on last year. Workers who got a pay bump had an average 4.5 per cent wage increase, the highest rate since at least 2010.