Grim update for mortgage holders
Australians' wages are on the rise for the first time in nearly a year, but it could have a negative impact for mortgage holders.
Australian wage growth continued to play 'catch-up' in the first quarter of 2025 after slumping to its lowest rate in almost two years last quarter.
Fresh figures from the Australian Bureau of Statistics on Wednesday showed wages rose by 0.9 per cent compared with expectations of wages growing by 0.8 per cent.
The wage price index is now up 3.4 per cent for the year. Aussie workers' wages are rising, albeit slightly. NewsWire / Andrew Henshaw Credit: News Corp Australia
ABS head of prices statistics Michelle Marquardt said annual wage growth ticked up for the first time since the June 2024 quarter.
'The 3.4 per cent increase in wages for the year to the March quarter 2025 was higher than the 3.2 per cent to the December quarter 2024 but lower than the 4.0 per cent at the same time last year,' she said.
Accelerating wages could have a negative impact on Australians looking for a rate cut.
'Australian wage price index data will kick off a focus on the Australian labour market, with the wage numbers and the labour force survey the final hurdle before next week's RBA decision. Wages are expected to have risen 3.2 per cent in the March quarter, suggesting very little inflationary pressure coming from what appears to be an otherwise tight labour market,' Capital.com senior financial market analyst Kyle Rodda said.
'Should the numbers and more importantly the April labour force report fall close enough to the pin, it will all but cement expectations of an RBA cut.
'Currently, the markets are fully pricing in another reduction in the cash rate at this month's meeting.'
Commonwealth Bank senior economist Stephen Wu said prior to the announcement there would be a sizeable wage increase for a small portion of workers.
'The latest sharp fall in businesses citing labour as a significant constraint on output is consistent with this idea. And the rise in sales as a constraint on output suggests that the unemployment rate would be higher absent the contribution from the non-market sector,' he said.
Over the prior six months, wages have stalled. A growth rate of 0.7 per cent in the 2024 December quarter undershot expectations of a 0.8 per cent growth rate.
Annual wages are now up 3.2 per cent, down from 4.2 per cent in December 2023.
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