CANBERRA, AAP – The annual rate of wage growth is expected to have sunk to a record low as a result of last year’s recession, keeping just ahead of an equally sluggish inflation rate.
The December quarter wage price index – used by the Reserve Bank and Treasury in gauging wage growth – is released on Wednesday.
Economists expect wages to have grown by just 0.3 per cent in the final three months of 2020, following a meagre 0.1 per cent increase in the previous three months.
This modest improvement won’t stop the annual rate sinking to around 1.1 per cent, down from the current record low of 1.4 per cent as of the September quarter.
The annual inflation rate is currently running at a paltry 0.9 per cent.
While Australia’s labour market has seen a marked recovery from last year’s pandemic-induced downturn, the unemployment rate of 6.4 per cent is still well above the 5.1 per cent rate seen prior to the COVID-19 crisis.
It suggests full employment, and in turn a decent pay rise, is still some way off.
Also on Wednesday, construction work data for the December quarter are released.
Economists are predicting a one per cent increase for the quarter, helped by strong home building that has been encouraged by low interest rates and government initiatives.
The data will feed into the economic growth calculation for the December quarter national accounts that will be issued on March 3.
The national accounts are expected to show an extension of the economic rebound of 3.3 per cent seen in the September quarter last year after the seven per cent slump in the previous three months.
What is known so far is that retail spending rose by a healthy 2.5 per cent in the quarter.