Australian wages are surging but trailing far behind inflation, leaving workers worse off overall, according to data taken from job ads around the country.
The 4.4 per cent yearly jump in advertised salaries came with a warning wage growth might have peaked, even as inflation hit 7.75 per cent amidst a cost of living crisis.
The January rise revealed by job agency Seek overnight was 0.2 percentage points lower than December’s figure and came as monthly growth fell for the second consecutive month.
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Seek senior economist Matt Cowgill said while advertised salary growth was still strong “there are signs we might have seen the peak”.
“This moderation in advertised salary growth echoes some other labour market indicators, such as the unemployment rate and job ad volumes,” he said.
“However, the labour market is still very tight, just not as tight as it was a few months ago.”
He pointed out the figures left wage growth well behind inflation.
“That means real, inflation-adjusted advertised salaries are falling, adding to the cost-of-living squeeze on Australian workers,” Cowgill said.
“Advertised salaries continue to grow faster than overall wages and salaries, suggesting that employers are still in a bidding war for talent and so changing jobs is still a good way to get a pay rise for those feeling the pinch.”
On a state level, Tasmanian job hunters were in the best position thanks to a jump in advertised salaries of 6.4 per cent, when compared to January 2022.
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The ACT sat at the other end of the scale with 3.1 per cent despite stronger public sector job ads narrowing the gap.
Trades and services and design and architecture led the way for industry at rates above 6 per cent while the legal and consulting and strategy sectors almost stagnated with nominal growth of about half a per cent.
The Reserve Bank has been relentlessly hiking interest rates in an attempt to get inflation, triggered by a host of factors including the war in Ukraine, energy prices and supply chain issues, under control.
On that front at least, the latest Seek Advertised Salary Index figures were positive.
“The fact that advertised salary growth hasn’t continued to accelerate beyond the current level of growth is good news for inflation as we don’t see signs of a price-wage spiral in the data,” Cowgill said.
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The interest rate hikes, designed to reduce demand and cool off the overpowered economy, have hit many mortgage holders hard, particularly after Lowe’s March 2021 prediction rates would be unlikely to rise before 2024, which he has admitted were a mistake.
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