Australia's Q4 total hourly wage rates ex bonuses grew 0.5%, as compared with expectation of 0.6% qtr and average rise of 0.6%qtr in the previous eight quarters. In annual terms, it grew 2.2%, as compared with the 2.5% y/y growth. Wages in private sector grew 0.5% q/q after growing 0.5% qtr in each of the past three quarters. In annual terms, the wages in private sector grew 2%, a new record low.
Including bonuses, the annual rate dropped to 2.2% in Q4 from 2.7% in Q2. The pace of growth is slower than expectations given the recent increase in hours. The decline in ToT and its impact on national income growth has been a considerable part of the story. However, the changing composition of employment gains from mining, construction, hospitability and other household services have also contributed to that. These sectors can draw in a larger supply of labor and they also have a weaker power of collective bargaining.
Wage inflation in public sector weakened to 0.5% q/q in Q4 from an average of 0.7% q/q in the previous four quarters. In annual terms the growth ease to 2.6% y/y from 2.8% y/y. Region wise, wages inflation continued to moderate in WA to1.8% y/y. ACT wage inflation was 1.6% y/y.
Wage inflation is controlled as pressure comes out of the former hot industries and sectors. This gives a benign outlook for inflation, which is expected to remain.
