Australia’s labour market remains tight and on a solid footing, without showing signs of material strengthening, according to the latest monthly Commonwealth Bank Wage and Labour Insights report. The report utilises de-identified salary flows from approximately 400,000 CBA accounts to provide an early snapshot of wages and employment trends. This offers a timely view of shifting conditions at potential policy turning points ahead of official ABS data releases. Commonwealth Bank is one of Australia’s largest banks, providing a range of financial services to individuals and businesses. It also offers economic analysis and insights through various reports.
Wages growth in Australia held steady in January, with CBA data indicating quarterly wage growth at 0.8 per cent and annual growth at 3.1 per cent. Overall, wages have been tracking broadly sideways, though there has been a gradual lift in quarterly outcomes since mid-2023. Western Australia continued to report the strongest wage gains, while outcomes across the eastern states remained steady.
According to CBA economist Harry Ottley, firm but not excessive wage growth coupled with weak productivity growth means businesses continue to face elevated labour cost pressures. “This underpins our assessment that labour market conditions remain tight and are still contributing to inflation,” Ottley stated.
Given these conditions, CBA economists continue to expect one further interest rate increase in May, which would take the cash rate to 4.10 per cent.
