Wages growth is remaining steady in Australia despite growing inflationary pressure and geopolitical uncertainty.
The latest CommBank Wage Insights series, released this week, shows wages grew by 0.8 percent in the three months to April 2026 and annual growth was steady at 3.1 percent.
CommBank Economist Harry Ottley said the effects of rising interest rates and the Middle East conflict were yet to flow through to CBA’s wages growth data.
“CBA Wage Insights showed wages growth remained stable in April, consistent with the broader labour market – the trend unemployment rate has held at 4.3 percent since July 2025,” Ottley said.
“As wages growth typically lags labour market and economic conditions, it is not surprising that higher interest rates and the Middle East conflict have not yet flowed through our data.
“While economic growth is expected to slow this year, current wages growth forecasts could still be surpassed. Workers could seek higher wages in response to inflation pressure.”
Mr Ottley said the data supported the view that Australia’s labour market remained stable and has not yet shown a clear wage response to inflation.
“This reinforces our assessment that the labour market is broadly stable, and still slightly tighter than what is considered full employment,” Ottley said.
The CommBank Labour Insights series shows employment growth remains steady, with an estimated 23,000 jobs added in April, the same as March.
Mr Ottley said employment growth was expected to soften through the second half of 2026.
“The labour market remains resilient to higher interest rates and the Middle East conflict at this early stage,” Ottley said.
“Employment growth is likely to slow this year as the broader economy weakness.
“Indeed, the RBA is relying on the labour market loosening to bring the economy into balance. There are no signs of this to date.”
