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Wage rises for Australians are in the works, RBA says
The Reserve Bank of Australia (RBA) is putting its faith in strong employment data as it resists the temptation to cut the official cash rate, which has remained unchanged since August 2016 at a record low 1.5 per cent.
Wage rises for Australians are in the works, RBA says
The Reserve Bank of Australia (RBA) is putting its faith in strong employment data as it resists the temptation to cut the official cash rate, which has remained unchanged since August 2016 at a record low 1.5 per cent.
The latest data released by the Australian Bureau of Statistics (ABS) shows strong growth in the employment sector with an increase of 20,7000 persons. Full-time employment increased by 18,000 to 8,781,800 and part-time employment increased 2,700 to 4,008,2000 persons.
Governor of the reserve bank Philip Lowe believes employment and wage growth will continue to stimulate the economy, despite weaker inflation figures.
“The unemployment rate has been broadly steady at around 5 per cent over this time and is expected to remain around this level over the next year or so, before declining a little to 4.75 per cent in 2021. The strong employment growth over the past year or so has led to some pick-up in wages growth, which is a welcome development,” said Mr Lowe.
The RBA also believes the current skills shortage in some sectors of the economy will drive up wages.
“The Australian labour market remains strong. There has been a significant increase in employment, the vacancy rate remains high and there are reports of skills shortages in some areas. Despite these positive developments, there has been little further progress in reducing unemployment over the past six months,” said Mr Lowe.
The RBA’s data is reaffirmed by Robert Half salary guidelines, which has said that strong competition and skills shortages will increase salaries.
“With the skills shortage creating a more competitive marketplace, salaries for IT professionals are continuing along an upwards trajectory. In 2018, the annual wage growth in the Australian IT sector was reported to be 3.3 per cent,” Robert Half said.
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