Australia’s wage growth held steady in the September quarter, with economists saying the latest figures did little to ease concerns about persistent inflation pressures.
The Wage Price Index rose 0.8 per cent in the September quarter 2025, according to new data from the Australian Bureau of Statistics.
ABS head of prices statistics Michelle Marquardt said: “Annual wage growth to the September quarter 2025 was 3.4 per cent. Annual wage growth remained steady compared to the June quarter 2025 but was slightly lower than this time last year.”
Quarterly wage growth matched the June quarter 2025 and the September quarter 2024, while private sector wages increased 0.7 per cent over the quarter, while public sector wages rose 0.9 per cent.
Annual public sector wage growth reached 3.8 per cent, up slightly from 3.7 per cent a year earlier.
Public sector wages continued to outpace private sector wages for the third consecutive quarter. According to the AB, state government activity was the main driver of recent movements.
“State government pay rises contributed 82 per cent of public sector wage growth this quarter,” Marquardt said.
Private sector wages were up 3.2 per cent over the year to September, lower than the 3.5 per cent rise recorded in the year to September 2024.
Marquardt said “this September quarter, 47 per cent of private sector jobs saw a change in their wages compared to 49 per cent in the same quarter last year.”
The average size of wage changes also eased, lifting 3.6 per cent compared with 3.9 per cent in the same period last year. The quarter’s outcome reflected the Fair Work Commission’s Annual Wage Review, which delivered a 3.5 per cent increase from 1 July 2025, down from the 3.75 per cent awarded in 2024.
GSFM investment specialist Stephen Miller said the data was unlikely to influence the Reserve Bank’s stance.
“The wage price index (WPI) won’t move the dial for the Reserve Bank of Australia’s (RBA) Monetary Policy Board,” he said.
He added the figures may have “allayed any nascent concern of ‘tightness’ in the labour market,” but would not ease “real anxiety around ‘last mile’ complications in getting inflation back to the middle of the target two to three per cent range.”
Miller said the September quarter CPI and the October labour force report meant rate cuts would likely remain off the table until 2026. He noted the RBA would continue to rely on broader indicators such as unit labour costs, which “continue to run at five per cent per annum.”
VanEck head of investments and capital markets Russel Chesler said stable wage growth was “relatively good news for preventing inflation from creeping up higher, but a lower WPI rate would be helpful for bringing inflation levels down.”
He further highlighted the growing gap between private and public wages.
“In the private sector, wages rose 3.2 per cent for the 12 months to 30 September… Meanwhile, public sector wages increased by 3.8 per cent in the September quarter – slightly up on the 3.7 per cent growth in both the previous quarter and last year’s September quarter.”
