Yesterday the RBA said that the trajectory of income growth was uncertain (they were less bullish than previously), and today the latest ABS data on wages growth showed a further fall compared with last time.
In fact you can mount an argument the federal budget is already shot as a result.
The seasonally adjusted Wage Price Index (WPI) rose 0.5 per cent in March quarter 2018 and 2.1 per cent through the year.
Seasonally adjusted, private sector wages rose 1.9 per cent and public sector wages grew 2.3 per cent through the year to March quarter 2018.
In original terms, through the year wage growth to the March quarter 2018 ranged from 1.4 per cent for the Mining industry to 2.7 per cent for the Health care and social assistance industry.
Victoria and Tasmania both recorded the highest through the year wage growth of 2.3 per cent and the Northern Territory recorded the lowest of 1.1 per cent.
And bear in mind this weak result comes despite the Fair Work Commission’s June 2017 decision which lifted the minimum wage 3.3% and to $18.29 from July and flowed to ~2.3 million workers. This means the annual wages growth number contains this artificial artifact which means the underlying would be even lower.
And by the way you can argue this metric overstates the true picture as we see a lift in low paid jobs away from higher paid areas, like mining, and the ABS data does not adjust for this.
For comparison, the Average Compensation of Employees from the national accounts which is to December 2017 is tracking even lower circa 1.3%.
Either way, more mortgage stress ahead…
