Wage data offers no clues on rate cut
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SYDNEY, Nov 14 AAP
November 14 2012, 11:59AM
A slightly weaker-than-expected reading for wage prices in Australia gives few clues on whether the reserve bank will cut its interest rate soon.
Total hourly rates of pay, excluding bonuses, rose by a seasonally adjusted 0.7 per cent in the September quarter, official figures released on Wednesday show.
The wage price index rose 3.7 per cent from a year earlier, the Australian Bureau of Statistics (ABS) also said on Wednesday.
The median market forecast was for a rise of 0.8 per cent in the September quarter.
In the June quarter, the index rose an unrevised 1.0 per cent.
HSBC chief economist Paul Bloxham said the numbers were expected to have some impact on the Reserve Bank of Australia (RBA)'s thinking ahead of its next rate decision, in December.
"This was something the RBA highlighted was a big concern for them in last week's official statement," he said.
"They suggested (that) if wage growth was too strong, because productivity is too weak, that might constrain them from being able to cut rates too much further.
"As it turns out, the data is a bit inconclusive, because it's weaker than the market expected, but not weak enough to say the coast is clear.
"I think it will come down to other things."