Advertised salaries grew year-over-year in December but applications per vacancy fell. Dr Blair Chapman warns that wage gains fail to match accelerating inflation
What’s happening: The SEEK Advertised Salary Index rose 3.8% year-over-year in December 2025, the fastest growth since September 2024, with consistent monthly increases of 0.3% throughout the year.
Why this matters: Rising advertised salaries may appear positive, but they mask a deeper labour market contraction and purchasing power erosion. Inflation accelerated to 3.4% by November, outpacing wage growth and eroding real household income.
In December 2025, Australia’s advertised salary growth reached its fastest pace in months. The SEEK Advertised Salary Index climbed 3.8% year-over-year, marking the strongest annual increase since September 2024. On the surface, this looks reassuring for Australian workers considering salary negotiations and job transitions in the new year.
Dr Blair Chapman, SEEK Senior Economist, offers a reality check. “Advertised salary growth was remarkably consistent in 2025. Increases of around 0.3% each month over the second half of the year was enough to see the annual rate of growth reach 3.8% in December, the fastest annual growth since September 2024,” Chapman explains.
But salary growth alone tells an incomplete story. “Despite faster growth in advertised salaries, many households likely felt a cost-of-living squeeze in the second half of 2025. Consumer prices also accelerated over this period, with annual inflation rising from 1.9% in July to 3.4% in November,” Chapman notes.
This gap between wage growth and inflation is material. When inflation runs 3.4% and advertised salary growth sits at 3.8%, the real wage gain is marginal. Households facing higher rent, energy, food and transport costs are not keeping pace with price pressures. The salary bump feels hollow when the cost of living rises almost in lockstep.
The Reserve Bank has signalled its concern. In its November Statement on Monetary Policy, the RBA revised inflation forecasts higher, with year-ended headline inflation expected to remain above 3 per cent for much of 2026. If inflation persists above 3.5%, any advertised wage growth below 3.8% represents declining household purchasing power.
Job Market Momentum Stalls
While advertised salaries edged upward, the employment landscape contracted markedly. SEEK job ads fell 1.2% month-on-month in December and 3.5% year-on-year. Applications per job advertisement declined 0.3% month-on-month, following an incremental decline since June that has narrowed candidate interest.
“Job ads continued trending down in December, rounding out the softening that began in August and bringing the trend decline to 3.5% year-on-year,” Chapman states. “The Industrial and Construction sectors that had provided a degree of stability throughout much of the year eased in December. Manufacturing, Transport and Logistics fell 1.6% month-on-month, though demand remained 3.3% higher year-on-year.”
The December slowdown exceeded typical pre-Christmas hiring patterns. Chapman notes: “Hiring typically slows down ahead of the Christmas and New Year period and the 2025 slowdown was a little bigger than we’ve seen historically. January traditionally brings renewed momentum into the employment market, as businesses reemerge from holiday mode. Whether the rebound in January is enough to see job ads trending up again will soon be seen.”
This represents a critical inflection point. The labour market has been supportive for job seekers throughout 2024 and early 2025. Candidates could typically choose between multiple positions, and employers competed actively on salary and benefits. That dynamic appears to be shifting.
Applications per ad have contracted incrementally since June. When fewer candidates apply per vacancy, competition for positions increases, hand-to-hand negotiations weaken, and salary offers tighten. Workers planning job transitions in 2026 face a materially different environment than those who moved roles in 2024.
Winners and Losers Emerge
Within the headline contraction, stark sectoral divergence is emerging.
Construction jobs grew 6.0% annually despite month-on-month softening. Trades and Services rose 3.1%, Manufacturing and Transport and Logistics climbed 3.3%, and Design and Architecture expanded 3.5%. These sectors remain robust, suggesting infrastructure investment and skilled-trade demand continue to support employers.
By contrast, consumer-facing industries contracted sharply. Retail and Consumer Products fell 2.6% month-on-month. Call Centre and Customer Service declined 1.9%. Hospitality and Tourism fell 1.6%. These sectors face dual pressures: consumer spending caution and seasonal year-end softening.
The geographic picture is equally uneven. Queensland was comparatively resilient, with job ad declines of just 0.1% month-on-month. Growing demand in Government and Defence (3.3%), Trades and Services (1.4%) and Construction (1.3%) bolstered the state.
Victoria and New South Wales, the two largest labour markets, declined 1.4% and 1.0% month-on-month respectively. Both states are now down over 4% year-on-year, suggesting a more sustained softening in these major markets.
The territories experienced sharp declines. Australian Capital Territory fell 14.7% year-on-year, and Northern Territory dropped 13.0% annually. Competition among applicants in these smaller regions intensified markedly, rising 9.4% in the Northern Territory and 2.3% in Tasmania.
Notably, public sector employment contracted across the board. Government and Defence fell 16.2% year-on-year, the second-largest annual decline after Insurance and Superannuation, which fell 16.6%.
What January Will Reveal
The SEEK data points to a labour market in transition. December’s softening was sharper than historical norms, suggesting the hiring pulse has genuinely weakened rather than following routine seasonal patterns. Advertised salaries continued upward, but at a pace that barely exceeds inflation.
For workers evaluating career moves in early 2026, the implications are clear. Positions in construction, trades and design remain relatively accessible. Consumer-facing roles face heightened competition. Salaries are growing, but real purchasing power is not expanding. Job choice matters more than it did twelve months ago.
Chapman’s cautious note on January is crucial. “January traditionally brings renewed momentum into the employment market, as businesses reemerge from holiday mode.” If that renewal fails to materialise, if job ads remain soft or slide further, then the Australian labour market has entered a genuine softening phase. Candidates and employers alike will need to recalibrate expectations accordingly.
The stability of 2025 advertised salary growth, Chapman emphasised, came despite underlying labour market stress. That stress appears to be intensifying as we move into 2026.
