Australian wages are failing to keep pace with inflation after official figures revealed a decline in real terms for the second quarter in a row.
Wages growth remains at record lows with the quarterly wage price index from the Australian Bureau of Statistics (ABS) rising just 0.6 per cent in the June quarter in seasonally adjusted terms.
On an annualised basis, wages grew at 2.6 per cent – the same as the previous quarter – which is well below the inflation rate of 3 per cent.
The figures follow last week’s unexpected spike in the unemployment rate to 6.4 per cent in July, and mean most Australians effectively took a pay cut during the three months to the end of June.
RBC Capital Markets economist Su-Lin Ong says there are not enough jobs being created to drive wages higher.
“Real wages are going backwards. We know purchasing power accordingly is pretty limited here,” she said.
“I think for us that’s one of the key headwinds for consumers going forward. We expect consumption, household consumption, to remain fairly modest.”
Private sector wages have suffered the most, easing from 2.6 per cent growth to 2.4 per cent.
Public sector wages growth, meanwhile, dropped to 2.8 per cent from 2.9 per cent, still below the pace of inflation.