The 0.7% rise in the QI WPI was bang on market expectations of a 0.7% rise {CBA (f) 0.8%}. Annual wages growthremained steady at 2.6%pa and below the 3.1%pa growth a year ago and well below the average 3½-3¾%pa growth ratesposted in 2012. These annual WPI readings of 2.6% are the lowest since the series began in 1997. Wages growth is nowmore than 1% below its 10-year average of 3.8%pa. In today’s deregulated and decentralised wages system most workershave precious little real pricing power, and are essentially “price takers” rather than “price makers”. Wages have nowmoderated to under the inflation rate. This signals falling real wages (i.e. 2.6% private wages growth vs CPI of 2.9%in QI).
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