As it stands | Wage Price Index
Wages growth maintained its subdued pace in the December quarter lifting by 0.53% as the annual pace held steady at 2.22%, both in line with consensus (full review here).
If bonuses are included, the WPI fell sharply in Q4 to 0.07% after a 1.28% jump in Q3, which saw the annual pace decline to 2.21% from 2.83%. A 1.44% spike in the private sector measure in Q3 vanished in the December quarter (0.0%), lowering the annual pace to 2.29% from 3.0%. Public sector wages including bonuses lifted by 0.44% in Q4 after a 0.74% lift in Q3, moderating the annual pace to 2.25% from 2.41%.
Across the industries, the chart below highlights the lack of underlying momentum in wages growth across the economy. Overall, annual growth in the WPI was a touch slower through the year to Q4 (2.22%) than it was 12 months earlier (2.27%). That theme was reflected in 13 of the 18 surveyed industries. The 5 industries in which wages growth picked up compared to a year ago were; health care (3.06%yr from 2.84%), utilities (2.87%yr from 2.79%), professional, scientific and technical services (2.33%yr from 2.14%), mining (2.22%yr from 1.79%) and information media and telecommunications (1.65%yr from 1.59%).
The consensus expectation for today's report is for the WPI to advance by 0.5% on the quarter — matching the rise from the previous three quarters — between a range of individual estimates from 0.3% to 0.6%. A consensus outcome would result in the annual pace easing a touch from 2.2% to 2.1%.
What to watch | Wage Price Index
Today's report will be of little significance given the shock that will come through in the June quarter. Overall, expect to see another subdued outcome on the headline numbers, remaining consistent with an elevated level of spare capacity in the labour market that had become well entrenched over the years leading up to the pandemic.