Published: Wed, May 16, 2018
Markets | By Otis Pena

Wages record second-weakest quarterly growth in two decades

Wages record second-weakest quarterly growth in two decades

Victoria and Tasmania both recorded the highest through the year wage growth of 2.3 per cent and the Northern Territory recorded the lowest of 1.1 per cent.

With inflation running at 1.9 per cent, that means in real terms most workers have not seen any growth in their wages over the past year.

Australian wages rose a feeble 0.5 per cent last quarter and private-sector growth stayed near historic lows, a disappointing outcome that risks putting a lid on spending and restraining already tepid inflation.

The local dollar slipped 0.4 per cent to US$0.7447 as the data cemented views that the Reserve Bank of Australia (RBA) will hold rates at a record low 1.50 per cent for a prolonged period as it awaits a revival in consumer prices.

The lethargic results across the economy will be seized on by Treasurer Scott Morrison to argue for company tax cuts, as Labor questions whether cuts for businesses will end up in the pockets of workers.

United States stocks close lower amid rising Treasury yield
Stocks are opening moderately lower across the board on Wall Street, led by declines in technology and consumer-focused companies. Banks, which stand to prosper because of higher interest rates on loans, bucked the downward trend.

The former secretary of the Department of Finance, Jane Halton, criticised the government's wage growth expectations on Tuesday.

Despite a rise in job openings, wage growth continues to remain relatively flat across the nation.

Reading between the lines of Debelle's speech, the RBA won't raise interest rates until wages and household income grow faster than they have in recent times.

The yield on Australia's benchmark 10-year Note, which moves inversely to its price, rose 4-1/2 basis points to 2.823 percent, the yield on the long-term 30-year Note jumped 3 basis points to 3.313 percent and the yield on short-term 2-year up 2 basis points to 2.027 percent by 03:30 GMT.

"How much longer is wages growth going to remain at its current low rates?"

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