Australia's Annual Wages Growth Misses Estimates; Currency Falls




  • In Business
  • 2022-08-17 01:39:07Z
  • By Bloomberg
 

(Bloomberg) -- Australian wages advanced at less than half the pace of inflation in the three months through June, backing the Reserve Bank's move to give itself more flexibility on interest rates.

Most Read from Bloomberg

  • Saudi Billionaire Made $500 Million Russia Bet at War Onset

  • 'Next Generation' Moderna Coronavirus Booster Jab Approved for Use in Adults

  • These Six Cities Are Emerging as New Expat Hot Spots

  • America's $7 Trillion Retirement Crisis Is Only Getting Worse

  • Wells Fargo Plans Major Retreat From Mortgage Business It Long Dominated

The wage price index climbed an annual 2.6% last quarter, less than economists' expectations of 2.7% and coming in well below headline inflation of 6.1%, government data showed Wednesday. The currency fell below 70 U.S. cents after the release and government bond yields also declined.

The slightly weaker result may prompt the RBA to use the wriggle room it gave itself this month to return to quarter-point rate hikes in September after three consecutive half-point moves. Governor Philip Lowe has been flagging stronger wage growth is in the pipeline and likely to provide additional support to inflation pressures in the period ahead.

Australia's labor market is very tight, with unemployment at a 48-year low of 3.5% and vacancies elevated. Economists predict data Thursday will show the jobless rate remained unchanged in July as the economy added 25,000 roles.

In minutes of its August policy meeting released Tuesday, the RBA said liaison showed over 60% of firms expect to raise wages by more than 3% over the year ahead.

"Recent high inflation outcomes were a factor in current wage negotiations, but to date most firms expected to raise wages by less than inflation," it said.

Most Read from Bloomberg Businessweek

  • Whole Foods' Battle Against Black Lives Matter Masks Has Much Higher Stakes

  • Andreessen Horowitz Thinks It's Time for Adam Neumann to Build

  • Chinese Shun Debt and Pile Up Savings, Threatening Global Growth Engine

  • Being Thrown Off Social Media Was Supposed to End Alex Jones's Career. It Made Him Even Richer

  • London Lures Top Facebook Executives

©2022 Bloomberg L.P.

COMMENTS

More Related News

Australia Posts Fiscal Boost From Exports; Surplus Still Distant
Australia Posts Fiscal Boost From Exports; Surplus Still Distant

(Bloomberg) -- Australia reported a significantly improved budget outcome for fiscal 2022 even as Treasurer Jim Chalmers dismissed prospects for the books to...

Apple Ditches iPhone Production Increase After Demand Falters
Apple Ditches iPhone Production Increase After Demand Falters

(Bloomberg) -- Apple Inc. is backing off plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize...

Treasury 10-Year Yields Rise Above 4% for First Time Since 2010
Treasury 10-Year Yields Rise Above 4% for First Time Since 2010

(Bloomberg) -- Treasury 10-year yields extended their steepest monthly increase in almost 20 years to top 4% as elevated inflation and rapid central bank...

Darkness Descends on Cuba as Hurricane Causes Blackout
Darkness Descends on Cuba as Hurricane Causes Blackout

(Bloomberg) -- Cuba was hit by a nationwide blackout Tuesday after Hurricane Ian knocked out the country's ailing energy grid as it tore across the island en...

Vietnam Evacuates Thousands as it Braces for Noru, Strongest Typhoon in Decades
Vietnam Evacuates Thousands as it Braces for Noru, Strongest Typhoon in Decades

(Bloomberg) -- Typhoon Noru made landfall in Vietnam early Wednesday morning, knocking out power for more than 500,000 households and causing flooding and...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business