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Labour price inflation flat in June quarter

Wages only increased by 0.8 percent in the June quarter according to the latest data from the ABS, reducing pressure on the Reserve Bank of Australia to increase rates at its September board meeting.

Labour Price IndexLabour price inflation for the June quarter 2010 in the private sector was 0.7 percent compared to 1.0 percent for the public sector giving an average across all sectors of 0.8 percent, the sixth consecutive quarter that the “All sectors” wage price inflation quarterly increase was below 1.0 percent.

Wages in Australia’s public sector continues to outpace increases in wages in the private sector, but the difference between the two is narrowing. The gap between the public sector through the year change (4.0 percent) and the Private sector through the year change (2.7 percent) lessened this quarter relative to the March 2010 figures.

The largest increases in wages were seen in Western Australia, which recorded a 1 percent increase in the June quarter, reflecting the performance of mining as a driver of employment in the state, performing worst was the Australian Capital Territory with an 0.3 percent increase during the quarter.

Wage growth by industry was highest in Mining at 1.4 percent, with Transport, postal and warehousing and Other services both sharing the lowest labour price inflation figure of 0.2 percent increase for the June quarter..

Increases in wages over the last financial year by sector ranged from 1.7 percent for Wholesale trade to 4.7 percent for Electricity, gas, water and waste services. All industries with the exception of Electricity, gas, water and waste services and Health care and social assistance recorded lower through the year increases in the in the last year than in the previous year to June 30.

Labour price inflation for the next quarter is expected to increase, with Fair Work Australia announcing its first annual minimum wage decision on the 3rd of June 2010: an increase of $26 a week, effective from the 1 July 2010.

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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