Australia – “Wage inflation is moderating as expected”

In brief from WPAC’s note:

• September quarter Wage Price Index below the RBA’s expectation which pointed to a 0.9%qtr rise in both the September and December quarters of 2024
• Wage inflation peaked at 4.3%yr in December 2023 and has been drifting lower through 2024
• Wage Price Index (WPI) rose 0.8% (3.5%yr) … The RBA is currently forecasting annual wages growth to print 3.4%yr for end 2024 and hold at that rate through to June 2025.

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The WPI should easily come in under that RBA forecast by end 2024. While some will point to slowing wages as a reason to cut rates the RBA is in no hurry, still war of elevated demand and inflation likely to pop back above the top of the 2 – 3% target band once government cost of living subsidies roll off.

This article was written by Eamonn Sheridan at www.forexlive.com.