Australia Macro Updates

Key takeaway: The ABS Wage Price Index for the March quarter 2026, released today (May 13), showed wage growth holding steady but continuing its gradual deceleration. The WPI rose 0.8% in the March quarter — matching the pace of the previous two quarters — while annual growth eased slightly to 3.3%, down from 3.4% in December quarter 2025 and the lowest annual reading since mid-2023. Private sector wages rose 0.8% over the quarter and 3.2% annually, while public sector wages grew a more modest 0.5% for the quarter and 3.3% annually — narrowing the gap between sectors after five consecutive quarters of public sector outperformance. The healthcare and social assistance industry was again the dominant driver, rising 0.7% in the quarter, supported by the Commonwealth-funded Early Childhood Education and Care worker retention payment and Queensland hospital health care worker agreements. The share of jobs recording annualised wage growth above 4% fell to 22% — the lowest since June quarter 2022 — while almost two-thirds of jobs recorded growth in the 2–4% band. For the RBA, the data is modestly comforting — wages are growing at a pace broadly consistent with the inflation target over the medium term, and the gentle easing in annual growth reduces the risk of a wage-price spiral even as the Iran war energy shock pushes headline CPI temporarily higher. The result marginally supports the case for a cautious rate cut later in 2026, though the RBA will want to see further confirmation that underlying inflation is on a sustained downward path before moving.    

• The Wage Price Index increased 0.8% q-o-q in 1Q 2026 (Expectations = 0.8%)
• The Wage Price Index increased 3.3% y-o-y in 1Q 2026 (Expectations = 3.3%)

19th Feb 2026
Key takeaway: The latest quarterly Wage Price Index data for Australia shows the Index rose 3.4% y-o-y in 4Q 2025, unchanged from the previous quarter. On a q-o-q basis, the Index increased 0.8%. The print was mostly in line with consensus expectations. The quarterly released wage price index is one of the most important macroeconomic data points for Australia. Similar to most other developed economies, Australia saw a period of substantial wage gains post the pandemic touching a high a 4Q 2023. Since then, the Index had been on a downward trend, with declines recorded in the 4 quarters of 2024. However, the Index has held steady at around 3.4% to 3.5% y-o-y growth throughout 2025. The latest release shows the labour market continues to remain tight in Australia. The employment data in recent months has also been very robust, with the unemployment rate falling in recent months to 4.1%. Also, the 3.5% annual wage growth figure remains substantially higher than the 2% seen in the years prior to the pandemic. The RBA has stated previously that it views a wage growth rate of 3-4% to be consistent with achieving its target inflation of 2-3%. However, an increase in productivity is key to achieve that objective. Productivity in Australia has been a major issue in recent times with figures trailing both other OECD economies as well as Australia’s own historical track record. Rising wages in a weaker productivity environment add to inflation pressures. The RBA views overall economic growth to be quite robust in Australia. Recent higher inflation prints coupled with very strong job numbers made the RBA hike rates in February 2026, becoming the first major central bank to hike rates when the rest of the world is mostly in a cutting cycle. The recent wage growth figures as well as the latest employment numbers vindicate the RBA’s hiking decision.     

• The Wage Price Index increased 0.8% q-o-q in 4Q 2025 (Expectations = 0.8%)
• The Wage Price Index increased 3.4% y-o-y in 4Q 2025 (Expectations = 3.4%)

19th Nov 2025

Key takeaway: The latest quarterly Wage Price Index data for Australia shows the Index rose 3.4% y-o-y in 3Q 2025, unchanged from the previous quarter. On a q-o-q basis, the Index increased 0.8%. The print was mostly in line with consensus expectations. The quarterly released wage price index is one of the most important macroeconomic data points for Australia. Similar to most other developed economies, Australia saw a period of substantial wage gains post the pandemic touching a high a 4Q 2023. Since then, the Index had been on a downward trend, with declines recorded in the 4 quarters of 2024. Since then the Index has held steady at around 3.4% to 3.5% y-o-y growth through the 3 quarters of 2025. The latest release shows the labour market continues to remain tight in Australia, even though the unemployment rate has inched slightly up in recent months. Also, the 3.5% annual wage growth figure remains substantially higher than the 2% seen in the years prior to the pandemic. Nonetheless, the RBA views a wage growth rate of 3-4% to be consistent with achieving its target inflation of 2-3%. However, an increase in productivity is key to achieve that objective. Productivity in Australia has been a major issue in recent times with figures trailing both other OECD economies as well as Australia’s own historical track record. Rising wages in a weaker productivity environment add to inflation pressures. At the same time, while sales and business investment in the economy have been fine, GDP per capita has been falling for many quarters now. A weaker GDP per capita, rising home unaffordability, a tight labour market and sticky inflation complicate RBAs decision making. The RBA has been on hold since its August meeting when it cut the cash rate from 3.85% to 3.6%. The RBA Governor has also been vocal in highlighting the resilience in the Australian economy, the relatively tight labour market and continuing price pressures.    

• The Wage Price Index increased 0.8% q-o-q in 3Q 2025 (Expectations = 0.8%)
• The Wage Price Index increased 3.4% y-o-y in 3Q 2025 (Expectations = 3.4%)

13th Aug 2025

Key takeaway: The latest quarterly Wage Price Index data for Australia shows the Index rose 3.4% y-o-y in 2Q 2025, unchanged from the previous quarter. On a q-o-q basis, the Index increased 0.8%. The print was slightly higher than consensus expectations of 3.3% y-o-y. The quarterly released wage price index is one of the most important macro economic data points for Australia. Similar to most other developed economies, Australia saw a period of substantial wage gains post the pandemic touching a high a 4Q 2023. Since then, the Index had been on a downward trend, with declined recorded in the 4 quarters of 2024. Since then the Index has held steady at around 3.5% y-o-y growth. The latest release shows the labour market continues to remain tight in Australia, even though the unemployment rate has inched up in recent months. Nonetheless, the RBA views a wage growth rate of 3-4% to be consistent with achieving its target inflation of 2-3%. However, an increase in productivity is key to achieve that objective. Productivity in Australia has been a major issue in recent times with figures trailing both other OECD economies as well as Australia’s own historical track record. Rising wages in a weaker productivity environment add to inflation pressures. At the same time, while sales and business investment in the economy have been fine, GDP per capita has been falling for many quarters now. A weaker GDP per capita, rising home unaffordability, a tight labour market and sticky inflation complicate RBAs decision making.   

• The Wage Price Index increased 0.8% q-o-q in 2Q 2025 (Expectations = 0.8%)
• The Wage Price Index increased 3.4% y-o-y in 2Q 2025 (Expectations = 3.3%)

14th May 2025

Key takeaway: The latest quarterly Wage Price Index data for Australia shows the Index rose 3.4% y-o-y in 1Q 2025. On a q-o-q basis, the Index increased 0.9%. The print was higher than consensus expectations of 3.2% and 0.8%. The print was also higher than the 3.2% recorded in the previous quarter. The quarterly released wage price index is one of the most important macro economic data points for Australia. Similar to most other developed economies, Australia saw a period os substantial wage gains post the pandemic touching a high a 4Q 2023. Since then, the Index had been on a downward trend in the 4 quarters of 2024. The latest increase in wages for Q1 adds to the list of economic data points which add complexity to the RBAs monetary policy decisions. Inflation in Q1, while still on an overall declining trend, was higher than consensus expectations. Even monthly prints have indicated slightly hotter than expected inflation. One of the key issues for Australia in the recent quarters has been weaker productivity compared to historical averages. Rising wages in a weaker productivity environment add to inflation pressures. At the same time, while sales and business investment in the economy have been fine, GDP per capita has been falling for many quarters now. A weaker GDP per capita, rising home unaffordability and sticky inflation complicate RBAs decision making.   

• The Wage Price Index increased 0.9% q-o-q in 1Q 2025 (Expectations = 0.8%)
• The Wage Price Index increased 3.4% y-o-y in 1Q 2025 (Expectations = 3.2%)

19th Feb 2025

Key takeaway: The latest quarterly Wage Price Index data for Australia shows the Index rose 3.2% in 4Q 2024. The print was in line with expectations. But more importantly, it was significantly lower than the 3.6% recorded in the previous quarter. The quarterly released wage price index is one of the most important macro economic data points for Australia. Similar to most other developed economies, Australia saw a period os substantial wage gains post the pandemic touching a high a 4Q 2023. Since then, the Index has been on a downward trend in the 4 quarters of 2024. The latest print gives significant comfort to the RBA which initiated its cutting cycle with its first rate cut on 18th Feb 2025. Inflation, as measured by CPI, though still uncomfortably high has also been on a firm downward trajectory. Slowing wage growth, softening inflation and a weakening housing market have finally given the RBA sufficient ammunition to begin its rate cutting cycle. It is worth pointing out though that a 3.0%-4.0% annual wage increase level remains far above the 2-3% level seen in the years before the pandemic. The RBA has stated in the past that they would be comfortable with a 4% annual wage growth number so long as productivity remains on an improving trend. However, overall productivity has not kept pace in the past 12-18 months. Hence, any pick up back in inflation or the wage price index will potentially slow down the rate cutting cycle.  

• The Wage Price Index increased 0.7% q-o-q in 4Q 2024 (Expectations = 0.8%)
• The Wage Price Index increased 3.2% y-o-y in 4Q 2024 (Expectations = 3.2%)

13th Nov 2024

Key takeaway: The quarterly released wage price index is one of the most important macro economic data points for Australia. Similar to most other developed economies, Australia had seen a spurt in wages post pandemic as the economy re-opened rapidly and acute shortages in labour supply persisted for longer than expected. This had resulted in a period of continual annual wage gains (as reflected by the Wage Price Index) from December 2020. The rate of wage growth increased from an annualized 1.3% in 2020 to a cycle high of 4.3% in 4Q 2023. Q1 2024 was the first quarter since the 2020 pandemic that the rate of y-o-y increase in the Wage Price Index actually declined. The seasonally adjusted WPI had risen 4.1% y-o-y in Q1 2024 compared to 4.2% seen in the 4th quarter of 2023. 2Q 2024 recorded a similar 4.1% annual wage growth. The latest release shows the growth in the WPI decelerating to 3.5% y-o-y. This was also slightly lower than consensus expectations of 3.6%. On a q-o-q basis, the WPI increased 0.8%, slightly lower than consensus expectations of 0.9%. The latest release provides further comfort to the RBA on its fight against inflation. At the same time, given lower inflation readings, the latest report also implies that real wages are increasing for Australian workers. Inflation was 0.2% q-o-q and 2.8% y-o-y in Australia in 3Q 2024. The recently released NAB business confidence survey also showed input price pressures decelerating. Yet a 3.0%-4.0% annual wage increase level remains far above the 2-3% level seen in the years before the pandemic. However, the RBA has stated in the past that they would be comfortable with a 4% annual wage growth number so long as productivity remains on an improving trend.  Overall, the latest release strengthens the case for rate cuts on the horizon from the RBA, which importantly is the only developed economy central bank to hold back on a rate cutting cycle thus far. 

• The Wage Price Index increased 0.8% q-o-q in 3Q 2024 (Expectations = 0.9%)
• The Wage Price Index increased 3.5% y-o-y in 3Q 2024 (Expectations = 3.6%)

13th Aug 2024

Key takeaway: The quarterly released wage price index is one of the most important macro economic data points for Australia. Similar to most other developed economies, Australia had seen a spurt in wages post pandemic as the economy re-opened rapidly and acute shortages in labour supply persisted for longer than expected. This had resulted in a period of continual annual wage gains (as reflected by the Wage Price Index) from December 2020 till December 2023. Q1 2024 was the first quarter since the 2020 pandemic that the increase in the Wage Price Index actually declined on a year on year basis. The seasonally adjusted WPI had risen 4.1% y-o-y in Q1 2024 compared to 4.2% seen in the 4th quarter of 2023. This reduction was perceived positively by the market with money markets increasing the probability of RBA easing this year or at the minimum, ruling out any further rate hikes. Economists and market participants were expecting to see a continued decline in wage growth in subsequent months. However, the latest Q2 data released in August showed wage growth remained at 4.1%. The q-o-q growth figure was 0.8%, slightly lower than expectations of 0.9%. It is key to note though that a 4.0% annual wage increase level remains far above the 2-3% level seen in the years before the pandemic. However, the RBA has stated in the past that they would be comfortable with a 4% annual wage growth number so long as productivity remains on an improving trend. 

• The Wage Price Index increased 0.8% q-o-q in 2Q 2024 (Expectations = 0.9%)
• The Wage Price Index increased 4.1% y-o-y in 2Q 2024 (Expectations = 4.1%)

15th May 2024

Key takeaway: The quarterly released wage price index is one of the most important macro economic data points for Australia. Similar to most other developed economies, Australia had seen a spurt in wages post pandemic as the economy re-opened rapidly and acute shortages in labour supply persisted for longer than expected. This had resulted in a period of continual annual wage gains (as reflected by the Wage Price Index) from December 2020 till December 2023. Q1 2024 was the first quarter since the 2020 pandemic that the increase in the Wage Price Index actually declined on a year on year basis. The seasonally adjusted WPI rose 4.1% y-o-y compared to 4.2% seen in the 4th quarter of 2023. This reduction was perceived positively by the market with money markets increasing the probability of RBA easing this year or at the minimum, ruling out any further rate hikes. The 4.1% number was lower than consensus expectations of 4.2%. Similarly, at 0.8% the q-o-q wage price index growth also came in lower than consensus expectations of 1.0%. It is key to note though that a 4.0% annual wage increase level remains far above the 2-3% level seen in the years before the pandemic. However, the RBA has stated that they would be comfortable with a 4% annual wage growth number so long as productivity remains on an improving trend. The last point to note is that at roughly 4% nominal wage growth, real wage growth remains positive at the current level of inflation. That can also continue to keep the economy hot and pressure price increases. 

• The Wage Price Index increased 0.8% q-o-q in 1Q 2024 (Expectations = 1.0%)
• The Wage Price Index increased 4.1% y-o-y in 1Q 2024 (Expectations = 4.2%)

21st Feb 2024

Key takeaway: Similar to most economies in the developed world, Australia has seen inflation come down from its peak in 2022. Wage growth has remained robust as well. The latest data point from the Australian Bureau of Statistics on wages shows the Index increased 0.9% on a q-o-q basis and 4.2% on an annual basis. The numbers were mostly in line with expectations. However, the key point to note is that wage gains still continue to be far higher than historical averages and that keeps pressure on the look out for a wage price spiral scenario. It was also key to note that with inflation having come down substantially, an annual 4% plus wage growth number results in real wage increases for the average worker. The labour market in Australia still remains tight and the general expectation is for wage gains to continue at a robust pace. It is also one of the reasons why the market does not expect as many rate cuts in Australia compared to the US for instance. Lastly, the latest data showed wage gains increases were higher in the public sector compared to the private sector.  

• The Wage Price Index increased 0.9% q-o-q in 4Q 2023 (Expectations = 0.9%)
• The Wage Price Index increased 4.2% y-o-y in 4Q 2023 (Expectations = 4.1%)