Wages growth looks likely to have peaked, with advertised salaries ‘treading water’

Advertised salaries are growing at 4 percent annually, but that is a step down from the pay increases offered to new hires earlier this year.

With the Reserve Bank wary of the risk of a “price-wage spiral” that would entrench inflation and force even more aggressive interest rate rises to bring it back down, the Seek index offers comfort that was missing from recent official data.

The latest Wage Price Index (WPI) from the Australian Bureau of Statistics (ABS) showed pay rises were higher than expected at 3.1 percent over the year to September.

While job website Seek’s advertised salary index shows higher pay growth, it only reflects the pay being offered to new hires, which tends to be much more responsive to current economic conditions.

Both recruiters and economists generally agree that switching jobs is usually the path to a bigger pay jump, but it seems that the increases available are not growing as strongly as they were earlier this year.

Advertised salary growth has eased slightly from peaks earlier in the year.
Seek’s senior economist Matt Cowgill says advertised salary growth has eased slightly from peaks earlier in the year.(Supplied: Seek)

“Advertised salary growth is treading water, growing by around 0.4 per cent per month for the past several months,” noted Seek’s senior economist Matt Cowgill.

“But this lift in annual growth is more about what was happening in 2021 than what’s happening in 2022.”

Mr Cowgill said the stability in the monthly growth rate for advertised salaries probably indicates they are nearing a peak.

“Although advertised salary growth remains solid, it’s not keeping up with the cost of living. It’s also not continuing to accelerate,” he observed.

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