May 15, 2018

RBA warns unemployment will have to fall further before wages can rise

RBA deputy governor Guy Debelle said that the wage price index could undershoot the government's estimation.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

With the all important March quarter wage price index (WPI) out tomorrow at 11.30am, a senior Reserve Bank official has warned there’s a chance that unemployment will have to fall further than the central bank has forecast -- 5.25% -- from the middle of next year onwards, in order to get wage rises above the 2% level as measured by the WPI.

The March quarter WPI is expected to come in around 2.1%, unchanged from the December reading. If that happens, it will mean the index will undershoot the government’s budget forecast of 2.5% (which was cut from the very optimistic 2.75% a year ago).

Free Trial

You've hit members-only content.

Sign up for a FREE 21-day trial to keep reading and get the best of Crikey straight to your inbox

By starting a free trial, you agree to accept Crikey’s terms and conditions


Join the conversation

The Crikey comment section is members-only content. Please login or sign up for a FREE trial to engage in the commentary.

Share this article with a friend

Just fill out the fields below and we'll send your friend a link to this article along with a message from you.

Your details

Your friend's details