ABS wage data: Hospitality and retail workers pocket biggest pay rises

A typically low-paying sector that has been hit hard by the pandemic enjoyed the biggest wage increases during the year, new data shows.

Australian wages continue to rise, but not enough to further fuel talk of an anticipated interest rate hike by the Reserve Bank of Australia.

The Australian Bureau of Statistics wage price index rose 0.7% in the December quarter, bringing the annual growth rate to 2.3% from 2.2% in the September quarter.

“Economists were expecting a 0.7% rise, as was the RBA, but the weekly ABS wage index – which started at the start of the pandemic and is not a perfect comparison – was pointing to a much higher increase. greater by 1% or more. “said AMP senior economist Diana Mousina.

“So today’s results will likely see talk of a short-term RBA interest rate hike wane for now.

“Including bonuses, wage growth appears stronger, up 2.8% on the year to December, from 2.1% in the last quarter.”

CommSec senior economist Ryan Felsman said the 0.7% rise in the December quarter was the largest quarterly wage increase in 7½ years.

“Annual wage growth hit a record low of 1.4% at the end of 2020, as economic activity generally recovers from lockdown-related labor market disruptions,” Felsman said.

Private sector wage growth occurred across a wide range of industries, with companies seeking to retain experienced staff and attract new hires, rising 2.4% annually.

But public sector wages have lagged with annual growth of 2.1%.

Civil servants – who make up around 16% of Australia’s workforce – have been restricted by pay freezes and cuts, Mr Felsman said.

Tasmania recorded the highest annual wage growth rate (3%) and Western Australia the lowest (2%).

Retail trade posted the largest quarterly increase of any industry (1.2%), the highest rate for the sector since the September 2015 quarter.

At the other end of the spectrum, the education and training sector recorded the weakest quarterly growth rate of 0.3%, influenced by the expiry of several key company agreements, the lender said. ‘ABS.

During the year, the accommodation and food services sector recorded the highest growth rate (3.5%), influenced by the payment of annual Fair Work Commission wage increases for 2020 and 2021 during the March and December quarters.

The electricity, gas, water and waste sector recorded the weakest wage growth over the year (1.3%) for the second consecutive quarter.

Ms Mousina said wage growth was happening at a steady pace.

“Going forward, a further acceleration in wage growth is likely because the labor market has tightened,” she said.

Moreover, inflation has increased.

“There is a fairly circular relationship between wage growth and inflation,” Ms Mousina said.

“Higher wage growth leads to inflation, but higher inflation also leads to wage growth because businesses and consumers begin to price in and demand higher wage increases.”

She said the wage figures kept the odds of an RBA rate hike in August high.

The ABC expects the first spot rate hike from the all-time low of 0.1% to come at the June RBA meeting.

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