Australia: WCI turns the corner; underemployment ‘overstated’ - TDS

Analysts at TDS notes that Australia’s Q2 Wage Cost Index rose +0.5%/qtr and +1.9%/yr, spot on market forecasts but a pip lower than TD expected.

Key Quotes

“Q1 was revised up from +0.5% to +0.6%/qtr.”

“Private wage growth remained at 1.8%/yr while the public sector remained at 2.4%/yr. The largest increase was in mining (+0.8%/qtr) and while services WCI was marginally higher at 2.3%/yr, it will jump along with the 3.3%/yr lift in minimum wages in the next report.”

“The oft-quoted-by-the-RBA “record” underemployment is entirely skewed towards youth and students, i.e. 15-24 age bracket, while the prime working age (35-54) underemployment ratio is little changed. Escalating minimum wages growth could be a contributing factor to not finding enough work.”