Wage levels in Australia reach a record growth due to high inflation

The Reserve Bank of Australia (RBA) led by Philip Lowe managed to accelerate wages growth for the first in a long time, while the country’s economy faced record levels of inflation over the last thirty years.

According to government data released on Wednesday, the wage level difference between the second and third quarters was 1%, therefore, demonstrating the fastest increase since the beginning of 2012. An annual gain was 3.1%. Both outcomes exceeded initial forecasts and consolidated expectations of further monetary policy tightening, as well as another rate hike at the upcoming meeting in December.

As the central bank stated, the wage growth is consistent with its main goal to bring inflation back to target levels of 2-3% from its forecasted 8% peak.

In the minutes of the previous RBA’s meeting dated November 1, policymakers underlined the need to avoid a so-called “price-wage spiral”, despite maintaining moderate wages growth. The central bank’s close attention will be focused on the evolution of price-setting at firms and labor costs.