This marks the highest quarterly growth in wages since March 2012, with annual wages also recording the highest rate of growth since March 2013.

ABS Program Manager of Prices Michelle Marquardt said in seasonally adjusted terms, this growth was primarily driven by increases in wages for the private sector which grew at twice the rate of wages in the public sector - 1.2% compared to 0.6%.

“Labour market pressures in the private sector combined with the largest Fair Work Commission award increase in more than a decade saw rises in both the size of average wage changes and the proportion of private sector jobs recording a wage change,” Ms Marquardt said.

The annual increase remains in line with updated year-end forecasts from the Reserve Bank, at 3.1%.

This comes despite inflation currently sitting at 7.3%, with many including the RBA anticipating inflation to reach 8% or higher by year’s end.

These figures came ahead of forecasts from economists at CommBank, ANZ and NAB, who all saw quarterly wages increasing by 0.9%, and an annual growth of 2.9%.

Westpac economists had anticipated a quarterly increase of 1.1% in September, citing the fact that the September quarter has historically been where the majority of workers receive pay rises, alongside the increase to the minimum wage.

CommBank Senior Economist Belinda Allen said one of the key differences separating Australia from some of our other peer economies is that wages growth here has not rapidly accelerated.

ANZ Senior Economist Catherine Birch echoed this sentiment, noting wage growth in Australia has been disappointingly slow despite the very tight labour market.

“Australia’s WPI is well behind comparable international indicators. The US’s Employment Cost Index was up 5.0% and New Zealand’s Labour Cost Index was up 3.7% in the third quarter,” Ms Birch said.

“For the economy to grow sustainably and for the benefits to be distributed across businesses and workers - including the lowest paid - we need to see stronger wage growth going forward.”


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