The most controversial piece of data arising from Wednesday’s Q3 national accounts release from the ABS was the 3.2% rise in the compensation of employees (COE), which was the strongest rise since the December quarter of 2006.
The ABS explained that “wage pressures continue to build from skilled labour shortages, resulting in businesses paying more to attract and retain staff and is reflected in average COE per employee up 2.5%”. It added that “the Fair Work Commission’s increase in the minimum wage, and the increase in the superannuation guarantee also contributed to growth”:
The strong result, which is presented in annual terms below, will no doubt raise concerns of a possible wage-price spiral developing, which will prompt the RBA to hike rates harder:
