Wages have grown at their slowest pace in more than 20 years as a result of the coronavirus pandemic.
Consumer confidence has also slumped on fears the second wave will not be contained within Victoria, signalling trouble ahead for retail spending.
The June quarter wage price index grew just 0.2 per cent, the slowest rate since the Australian Bureau of Statistics began collecting the data in 1997.
It was the first full period that captured coronavirus social and business restrictions.
The annual rate has been dragged down to 1.8 per cent, which is also a record low.
Private sector wages grew by just 0.1 in the quarter to an annual rate of 1.7 per cent, while public sector wages were up 0.6 per cent to 2.1 per cent.
Wages fell in the construction, wholesale trade, accommodation and food, real estate and professional services sectors.
The fear of widespread coronavirus outbreaks has rattled Australians, with people now worried about a deeper economic recession and a major spike in unemployment.
The monthly Westpac-Melbourne Institute consumer sentiment index – a pointer to future retail spending – fell 9.5 per cent in August.
It’s now back down towards the low of 75.6 points in April, when Australia entered a national lockdown.
“The scale of the falls comes as a major surprise,” Westpac chief economist Bill Evans said.
The biggest shock was in NSW where sentiment collapsed by 15.5 per cent, far greater than the 8.3 per cent fall in Victoria.
Even in Queensland there was an 8.1 per cent drop.
“This emphasises the fear of the unknown,” Mr Evans said.
Views on the performance of the economy during the next 12 months recorded the biggest decline, slumping 19 per cent to be down more than 30 per cent since June.
Expectations about unemployment also jumped 14.6 per cent.
“Consumers across the nation appear to have been rattled by the developments in Victoria and fear that other states may also succumb to the second wave outbreak,” Mr Evans said.
But he believes these fears are overblown and will ease in coming weeks.
The more frequent weekly ANZ-Roy Morgan consumer confidence gauge has dropped for seven weeks in a row.
The National Australia Bank monthly business survey also showed confidence tumbling into negative territory, suggesting governments may need to extend supports until the economy is back on track.