Wage pressures taking time to appear in official measures


Wage growth is on the up as an incredibly strong labour market is translating into broader wage pressures across the economy.

In annual terms, wages, as measured by the Wage Price Index, grew by 2.6% in the June quarter – the fastest pace in eight years. However, this was not as strong as expected by many economists, including ourselves, especially given the strength in the jobs market.
Real wages also continued to decline, as inflation far outstrips nominal increases in wages.

So, what’s happening and why are wage pressures taking longer to appear?

Watch this short video to find out more:

Economic Insights - 18 August 2022

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The RBA has increased the cash rate by 175 basis points in the space of four meetings. This is the most aggressive tightening from the RBA in a four-meeting window since inflation targeting commenced in 1993. However, the latest move will not be the last in the cycle.


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