The Reserve Bank has poured cold water on hopes of a surge in wage growth for most Australians in the coming year.
The Reserve Bank has poured cold water on hopes of a surge in wage growth for most Australians in the coming year while lifting expectations the economy will be strong enough to withstand an early end to its $4 billion-a-week quantitative easing program.
The December minutes show that while there has been a lift in wages in some sectors and a tightening in the jobs market, the bank believes there is yet to be a wide scale lift in wages pressure.“Information from the bank’s liaison program suggested that firms were generally expecting wage increases over the coming year of around 2.5 per cent, broadly in line with surveys of unions’ expectations,” the minutes show.
“The higher rates of voluntary job turnover in some sectors, especially in a tight labour market, could in time lead employers to offer higher wages to retain their workers.” In February last year, the bank held just $16.3 billion in government debts including $14.2 billion worth of federal debt.The bank plans to revisit its bond-buying program at its first meeting of the year in February.
“The risk to the economy posed by the Omicron variant could shift the economic outlook, but that is not our central scenario,” he said.
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