A key release out of Australia will be the Wage Cost Index for the 1st quarter. Employment has been tight in Australia as export demand for Australia’s raw material’s from China keeps the participation rate high and wages firm.
In the 4th quarter wages rose by 1.1% on the quarter and were up 4.2% year on year. The Year on year figures equaled the highs set in 2005. This quarter the expectation is for another increase of 1.1%. The year increase is expected to rise to up 4.3%. A higher number will be worrisome for the Australian central bank as they continue to fight food and energy inflation. Should wage inflation continue to surge, the effects may find their way into the country’s consumer price index.
