Wages yet to get a lift from strong jobs

Economists expect the December quarter wage price index will again show only modest growth despite a strong labour market.

The economy may be creating the strongest jobs growth in history but it has yet to make an impression on Australians' wages.

The December quarter wage price index - the Reserve Bank's preferred measure of wages growth - is released on Wednesday.

Economists expect wages grew at a modest 0.5 per cent pace in the final three months of 2017 to leave the annual rate at two per cent and around its lowest level in at least two decades.

It would be broadly in line with the rate of inflation, suggesting wage increases are not resulting in extra household disposable income.

The Reserve Bank, in the minutes of its February 6 board meeting released on Tuesday, reiterated it expects income growth to pick up.

However, it also warned consumption might turn out to be weaker than forecast if household income growth were to increase by less than expected, especially at a time of high indebtedness.

Construction work figures for the December quarter are also released, a crucial component for the economic growth figures that are due for release on March 7.

Economists expect construction could have suffered a steep 10 per cent drop in the quarter compared with three months earlier and unwinding previous strong outcomes that were the result of a spike in engineering linked to the building of new LNG platforms.


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Source: AAP



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