SYDNEY: Australian wages growth remained at record lows in the second quarter, adding to concerns around rising strain on household budgets, which could put a brake on the economy. Wages grew 0.5% in the second quarter from the first, in line with economists’ expectations. The government data showed wages grew by just 1.9% on-year.
Public sector wages grew by 0.6% in the second quarter and by 2.4% on-year, the data showed. Private-sector wages grew 0.4% in the quarter and by 1.8% on-year. The Reserve Bank of Australia warned this week that wages growth continues to lag increases in household debt, which already stands at record highs. Meanwhile, consumers are facing sharp rises in utility costs, damping confidence and causing people to dip into savings to offset the flat income growth. Still, recent data has shown full-time jobs creation has stepped up in the last half year, lowering unemployment and fanning hopes that wages will eventually pick up and boost spending. The RBA recently published upbeat forecasts for economic growth and inflation, signalling it expects more solid wage gains over time.
