Employee earnings rise 6 per cent

Average basic earnings of full-time employees in Western Australia rose by 6 per cent through the year to May 2000. Earnings increased by 2.1 per cent in the three months from February to June.

Growth in WA earnings was well ahead of national earnings growth of 4.3 per cent. However, WA numbers are sometimes volatile, and this effect may owe more to changes in the composition of the workforce than to increases in individuals' earnings. Other Western Australian labour force indicators, such as employment, are weak.

The Australian earnings estimate has been revised downwards a little since preliminary data were released late last month, but still show earnings growth accelerating. This slight downward revision will make little impression on the Reserve Bank of Australia’s view that earnings growth is one of a number of factors tending to push inflation upwards. Its latest Bulletin says it is more likely that inflation will exceed the Bank’s 2-3 per cent target than fall below it. That means that interest rates may be raised again in the near future.