ICYMI, Australian data on wages is covered here:
and here:
Analyst responses suggest the RBA will not be unhappy with the data. Rapid growth in wages can be inflationary, and lead to interest rate rises, but Australia appears to have passed that stage.
ANZ:
- data suggest annual wage growth peaked last quarter
- Australia is unlikely to record the elongated peaks seen in some other economies
- we don’t think that will be enough to shift the RBA’s thinking, and still see the cash rate on hold at 4.35% until November
Westpac:
- In the May Statement on Monetary Policy, the RBA were forecasting the WPI to print 4.2%yr for June 2024. With the moderation in wage inflation presenting slightly earlier than anticipated in the RBA’s most recent forecast, this update will provide a little more comfort to the RBA Board with respect to assessing the risks around the inflation outlook, especially as it relates to services components.
Capital Economics:
- Wages growth is easing more rapidly than the RBA had anticipated.
- this will forestall any further policy tightening
- we still expect the Bank to wait until next year before lowering interest rates
AUD update:
AUD liked the US CPI result, and also the news out of China yesterday:
