Australia's Q4 wages likely to have increased by just 0.6% qoq: Societe Generale

Quotes from Societe Generale Cross Asset Research:

-The continued upward drift in Australia's unemployment through the second half of 2014 is likely to have maintained downward pressure on wage growth. Hence, we expect Q4 wages to have increased by just 0.6% qoq for the third successive quarter, which would imply a slowdown in the annual growth rate to 2.5% from 2.6% in Q3 (and the risks are probably skewed to the downside, though the weaker exchange rate should have helped prevent a weaker outcome).

-For Australia this would be an exceptionally subdued rate of growth, and would  indeed mark the weakest gain in the history of this index (which starts in mid-1997).

-However, the news is considerably more upbeat when it comes to real wage growth: thanks to the sharp easing of inflation from 3.0% in Q2 to 1.7% in Q4, inflation-adjusted wage growth began recovering in Q3 and is likely to have improved further in Q4, to 0.8% yoy from 0.3% in Q3, and negative rates in the preceding three quarters. In fact, this would mark the strongest real wage gain in two years.