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Australian wage growth still tepid but private sector catches up
[SYDNEY] Australian wages grew at a slightly slower clip in the fourth quarter from the third, but salary gains at private companies were the highest in five years, a boon for the country's heavily-indebted households who are holding back on everyday spending.
The wage price index rose 0.5 per cent in the three months ended December from 0.6 per cent in the September quarter, Australian Bureau of Statistics (ABS) data showed on Wednesday.
Annual wage growth was steady at 2.3 per cent, in line with forecasts, and above an all-time trough of 1.9 per cent seen during 2016 and 2017.
The miserly pace of wage growth amid other economic uncertainties weighing on consumption is a major reason the central bank will likely keep rates on hold for a long time.
Private sector wage growth, which has lagged government pay hikes for the last four years, jumped to 2.5 per cent - the highest since December 2014.
Wage growth in healthcare and education bolstered the December quarter outcome, with mining wages too picking up but still nowhere close to the rate enjoyed during the decade-long mining boom that began in the early 2000s.
In the private sector, financial services recorded the highest quarterly pay rise of 0.9 per cent.
Wage growth has steadily picked up since mid-2017 but is still well below rates of over 4 per cent seen between 2005 and 2009.
As a result, the Reserve Bank of Australia (RBA) does not see core inflation reaching the mid-point of its 2 to 3 per cent target band through 2021.
The RBA has held rates at a record low 1.50 per cent since last easing in August 2016, the longest period of stable policy in modern history.
Earlier this month, it shifted away from its previous tightening bias to a neutral stance, saying the risks for a move are now more evenly balanced on either side as the country's once booming property market slows.
Financial markets are already wagering a more than 50-per cent chance of a cut later this year.