Pay growth has risen in the year to August, despite the weakening labour market, according to report released today.
Total pay growth climbed 4.1 per cent in the year to August, from 3.3 per cent in the year to May, the Melbourne Institute said today.
University of Melbourne economist Dr Edda Claus said that while pay growth had picked up, Australians still weren't working as much overtime or earning as many bonuses.
Bonuses accounted for only 11.5 per cent of the reason people gave for why pay increased, while overtime made up 8.8 per cent.
Wage expectations over the next year remain have perked up, rising to 3.2 per cent in August, from 2.6 per cent in May, the Institute said.
"People have relatively healthy prospects of pay growth, but it's not a very high expectation," said Professor Claus.
Joblessness is increasing in Australia, although not nearly as rapidly as originally expected when the global financial crisis accelerated at the end of last year.
The unemployment rate was 5.8 per cent in July, unchanged from June. Analysts had predicted it to hit 6 per cent in the last month, as part of a rising trend.
Respondents in NSW are the most optimistic about future wage growth, according to the Melbourne Institute, with an increase of 5.1 per cent expected, followed by hopes of a 3.8 per cent increase in Queensland, and 2.9 per cent in Western Australia.
The Australian labour price index rose 0.8 per cent in the June quarter, in trend terms, helped by increases in retail sales, hospitality and construction, the Australian Bureau of Statistics said last week.
czappone@fairfax.com.au
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