Australia experienced its slowest wage growth in a year during the June quarter, indicative of a gradual loosening in the labor market, according to official data released on Tuesday.
In August, consumer confidence saw an uptick, bolstered by the tangible effects of tax cuts and other fiscal measures, as revealed by a private survey today.
The Australian Bureau of Statistics reported that the wage price index increased by 0.8% quarter-on-quarter, following a 0.9% rise in the first quarter. This moderate growth was last observed in the second quarter of 2023.
Annually, wage growth remained steady at 4.1%.
In the June quarter, the public sector contributed approximately 25% of the overall wage growth. Public sector wages increased at a faster rate of 0.9%, whereas private sector wage growth slowed to 0.7% from 0.9%.
"The stronger quarterly rise for the public sector in June primarily resulted from the newly synchronized timing pattern of Commonwealth public sector agreement increases," noted Michelle Marquardt, head of prices statistics at ABS.
Economist Abhijit Surya from Capital Economics indicated that while wage pressures are anticipated to ease, the Reserve Bank of Australia (RBA) is unlikely to alter its policy soon.
Previously, RBA Chief Michele Bullock stated that without improvements in productivity, wage increases around 3.5% might be insufficient to keep unit labor costs in check.
The economist predicted that the Board is likely to adopt a cautious approach and postpone any rate cuts until the second quarter of 2025.
The Westpac-Melbourne Institute Consumer Sentiment Index rose to 85 in August, up from 82.7 in July.
The increase in sentiment primarily focused on family finances, although concerns over the cost of living and potential rate hikes continued to loom.
"It is probable that the Board will maintain the cash rate at its next meeting," commented Matthew Hassan, Westpac's head of Australian macro-forecasting.
Meanwhile, the NAB business confidence survey revealed an improvement in the business conditions index to +6 in July. However, the business confidence index decreased to +1 point.
