Average weekly earnings grow strongly

Another measure of wages shows labour costs are growing strongly.
Kieran Davies

Coolabah Capital

Another measure of wages shows labour costs are growing strongly. 

Average weekly earnings is a wages series that is closer than the wage price index to the broadest GDP measure of wages that feeds into the calculation of unit labour costs, where the RBA is concerned by the risk that strong growth in nominal unit labour costs poses to the outlook for inflation.

Like the GDP measure of wages, average weekly earnings can be affected by changes in the composition in the workforce, such that it is more volatile than the wage price index.  

Average weekly earnings continue to pick up and have increased by 4% over the past year, which, excluding the distortions created by the government’s wage subsidy at the height of the pandemic, is the fastest growth in a decade. 

Private-sector average weekly earnings tell the same story, up 4.4% over the past year, which, ex-COVID, is also the fastest growth since 2013.

Like other measures of government wages, public-sector average weekly earnings continue to lag, up 3.6% over the past year. 

Average weekly earnings are growing strongly ...
Average weekly earnings are growing strongly ...


... led by the private sector as public-sector wages la
... led by the private sector as public-sector wages lag


 


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Kieran Davies
Chief Macro Strategist
Coolabah Capital

Based in Sydney, Kieran Davies is Chief Macro Strategist at Coolabah Capital Investments, an asset manager with 40 executives and over $8 billion in fixed-income strategies. Kieran is responsible for macroeconomic research and investment strategy,...

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