Wages in Australia Continue to Rise StronglyPosted: April 1, 2011
In “Australia Boom Pays Men Without Degree More Than Bernanke“, Bloomberg uses a gimmicky title to call attention to the tremendous gains in Australian wages during the current boom in commodities:
“Wages grew 3.9 percent in the three months through December from a year earlier, the fastest pace since the first quarter of 2009, according to government figures. When the central bank decided March 1 to keep its official cash rate at 4.75 percent, it said wage growth had returned to levels reached before a 2009 decline.”
Bloomberg also reports that Australian unions are seizing this opportunity to press for higher wages:
“The Construction, Forestry, Mining and Energy Union, Australia’s biggest in the building industry, sought pay increases in February of as much as 24 percent over four years. The Communications, Electrical and Plumbers Union is seeking annual pay rises of 5 percent over the next three years, almost double the inflation rate.”
The article speculates that tight labor conditions and rising wages could place additional pressure on the Reserve Bank of Australia to restart its rate-hiking campaign. Such speculation could explain the Australian dollar’s rapid rise to new all-time highs against the U.S. dollar.
Source: dailyfx.com charts
Disclosure: author is long FXA (Rydex Currency Shares Australian Dollar Trust ETF)