CANBERRA: A closely-watched measure of Australian labor costs held at record lows at the start of 2017, reaffirming calls for continued low-rate stimulus by the country’s central bank. The wage price index – a gauge of hourly wage growth – rose 0.5% in the three months ending March, following a similar gain e fourth quarter, the Australian Bureau of Statistics reported Wednesday from Canberra. Analysts in a median estimate forecasts gains of 0.5%. Compared to the same quarter a year earlier, the index rose 1.9%. The Aussie wage price index held at a record low of 1.9% for three straight quarters. The quarterly wage price index is an important indicator of labor cost inflation, which is directly tied to expectations of consumer prices. Wage inflation has been on a general downtrend for the past two years, and was a principal motivator for the Reserve Bank of Australia (RBA) to ease monetary policy.
The central bank has remained on the sidelines since last summer, with the official cash rate holding at a record low of 1.5%. Australia’s employment picture has rebounded in recent months, with full-time jobs gaining at a steady rate. The Australian economy has added jobs in five of the last six months, including a gain of 60,900 positions in March – the highest since November 2015. The statistics bureau will release April employment data on Thursday. Economists are expecting a net gain of 4,500 workers last month.
