Australia Wage Gains Quickened Last Quarter on Higher Mining Pay
Feb. 20 (Bloomberg) -- Australian wages rose at a faster pace in the fourth quarter, spurred by higher salaries in the mining industry and wholesale trade.
The wage price index, which measures hourly pay rates excluding bonuses, advanced 0.8 percent from the previous three months, when it rose 0.7 percent, the statistics bureau said today in Sydney. That matched the median estimate in a Bloomberg News survey of 22 economists.
The central bank cut interest rates by 1.75 percentage points in the 14 months through December to match a half-century low of 3 percent as it seeks to cushion an economy in which resource investment is expected to peak this year. It kept the benchmark rate unchanged this month in response to signs that China’s economy is stabilizing and the global outlook improving.
“The result is a bounce back from a slower third quarter,” Jo Heffernan, a senior economist at St. George Bank Ltd. in Sydney, said before the release of the data. “This is unlikely to be sustained over the coming year, though, as the labor market is softening.”
The wage price index advanced 3.4 percent in the fourth quarter from a year earlier, today’s report showed, matching the median economist forecast.
Hourly rates of pay in the mining industry jumped 5.1 percent and advanced 4.5 percent in wholesale trade, the biggest increases among the 18 industries surveyed by the statistics bureau. Pay at retailers increased 2.4 percent from a year earlier, and accommodation and food services rose 2.2 percent -- the weakest figures.
“Business surveys suggest that wage pressures eased further in the December quarter,” the Reserve Bank of Australia said in its quarterly policy statement released last week. “Liaison with firms also indicates that there has been a pick- up in the share of firms expecting no growth in average wages over the year ahead, and that skills shortages and wage pressures in the resources sector have eased.”
Australia’s economy is being driven by China, the nation’s biggest trading partner, which is buying up iron ore, coal and natural gas as millions of people in the world’s most populous nation move to urban centers. That has helped spur the nation’s currency above parity with the U.S. dollar and hurt industries outside of resources.
Traders are pricing in a 33 percent chance the central bank will lower borrowing costs by a quarter-percentage point to a record 2.75 percent at its meeting next month, swaps data compiled by Bloomberg show. The local currency was little changed after the data at $1.0348 at 11:42 a.m. in Sydney.
Australian employers added part-time jobs in January and fewer people hunted for work, helping keep the unemployment rate unchanged at 5.4 percent.
--With assistance from Daniel Petrie in Sydney. Editors: Malcolm Scott, Brendan Murray