According to Tony Kelly, Senior Economist at NAB, modelling shows that labour market slack, inflation and productivity help explain wage pressures in Australia and the United States.
“For Australia, changes in the terms of trade are also important. Currently subdued US wage growth reflects weak productivity growth, but we expect to see some improvement in coming years. For Australia, the modelling suggests that wages growth should already be picking up due to a fading terms of trade headwind, but this is yet to be seen in the data. Our expectations that Australia’s unemployment rate will decline further, and that there will be a gradual upwards move in inflation, also point to higher wages growth in the future.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.