The Wage Price Index (WPI) rose 0.4% in the June quarter with the annual growth rate at 1.7%.
Figures released today by the Australian Bureau of Statistics (ABS), show one of the lowest rates of quarterly growth recorded.
ABS' head of prices statistics, Michelle Marquardt, Head of Prices Statistics said the growth has slowed compared to the previous two quarters.
"Apart from a few isolated examples of skills shortages placing pressure on employers to meet expected market rates, the private sector wage growth recorded over the quarter was generally subdued," she said.
Private sector wages rose by 0.5%, while public sector wages rose by 0.4% - the same rate for the third consecutive quarter.
Compared to June quarter 2020, private sector hourly wage rates increased 1.9%.
"The annual rate of private sector wage growth was influenced somewhat by the initial dip in wages recorded in June quarter 2020, when the first impacts of the COVID-19 pandemic were recorded in the WPI," Ms Marquardt said.
At the same time, quarterly inflation increased 0.8%, meaning 'real wages' declined 0.4%.
Across the country rates of growth varied, with the Northern Territory recording the lowest quarterly growth (0.1%) while the Australian Capital Territory recorded the highest (0.6%).
Callam Pickering, APAC economist at Indeed, said that recent lockdowns will weigh on wage growth over the second half of the year.
"Overall wage growth remains very weak, barely keeping pace with core inflation. Strong hiring activity points towards higher wage growth in future but right now that is contingent on containing COVID and emerging from lockdown," Mr Pickering said.
Mr Pickering also highlighted wage growth continues to vary considerably across industries.
"On one hand we have professional services and other services, both of which have wage growth of around 2.5%. On the other hand, we have arts and recreation where wages are just 0.9% higher than they were a year ago," he said.
Looking towards the second half of the year, Mr Pickering anticipates softer wages growth - or even freezes - in those industries that are particularly sensitive to lockdowns such as arts and recreation, and accommodation and food services.
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