Wages growth...shows a further significant slowing to a 5 year low, with the ‘zero’ minimum wage decision likely to see a near record low result in Q4. The details show that private wages including bonus were also particularly weak. Given the WPI is a wage ‘rate’ rather than a wage bill, combined with still soft hours-worked and no further Government cash hand-outs, it flags a very significant moderation in 2H09 household income growth – and relatively subdued near-term consumption (before a likely jobs pick-up next year). This data would give the RBA more comfort that inflation will continue to slow ahead (as we expect), with labour market slack (albeit less than previously forecast) and evidence from business surveys – together with the minimum wage freeze – suggesting that wage pressures are likely to stay subdued for some time.While we had been forecasting an attenuation in capital growth rates in the second half of the year, and the September month results deriving from the RP Data-Rismark National Home Value Index were flat (combined with a fall in AFG's October housing finance application data), there is no evidence of any sustained weakness in auction clearance rates (although they have tapered somewhat from the mid year highs). Anecdotal liaison information from the very top end of the housing market also suggests that it remains strong, which is at least partly explained by the recovery in listed security markets and the financial services sector more generally.
Source: RP Data (click to enlarge)
