Australia's wage growth remained steady in June, but the picture could change in coming months, according to the latest CommBank Wage and Labour Insights report.
Key Points:
- Wages rose 0.8% in the three months to June, while annual wages growth held steady at 3.1%.
- Employment increased by an estimated 17,000 jobs in June, down slightly from 18,000 in May.
- The 'quits rate' continues to fall, indicating a cooling labour market.
Wage Growth Outlook: "The next few months will be important to watch. The increase in minimum and Award wages of 4.75% will likely see Q3 wages pressure pick up," CommBank Economist Harry Ottley said. CBA Economists expect wage growth to tick higher soon, forecasting WPI growth of 1.0%/qtr in Q3.
Employment Growth Slowing: The Australian labour market is showing signs of softening, with jobs growth of 17,000 in June. The data suggests employment growth is a touch below the 'break-even' level required to keep the unemployment rate from rising. CBA Economists expect the unemployment rate to rise to a peak of 4.8% in Q4 2027 from 4.4% at present.
Quits Rate Points to Easing Conditions: The 'quits rate' measures the share of workers who voluntarily leave their job. CBA's proxy for this rate continues to fall, consistent with a labour market that has kept cooling since peak tightness in 2022. "Overall, the data supports our broader view that the labour market continues to loosen gradually but remains a little too tight for comfort for the RBA," Ottley said.
State-Level Wage Growth:
- Western Australia retained the strongest wages growth at 3.7%.
- South Australia lifted to 3.7%, making it equal-highest with WA.
- Tasmania recorded the biggest pick-up, jumping to 3.3%.
- Victoria recorded the slowest wages growth at 3.0%.
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