Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Wednesday, 18 May 2016

Wages growth slows to a crawl

Wages sluggish

Is it time to get ready for even weaker non-tradables inflation and even lower interest rates? It could be.

The ABS Wage Price Index for Q1 2016 recorded wages growing by just +0.4 per cent in the first quarter, and by +2.1 per cent over the year. 

Private sector wages growth has slowed to a crawl at just +1.9 per cent, while wage price growth in the public sector was +2.5 per cent.

State versus state

Since 1997, the strongest wage price growth has been experienced in Western Australia, and the weakest in Tasmania. 

As for the states and territories that are driving soft wages growth lately? Not to put too fine a point on it, it's all of them.

Industry groups

Mining and construction wages growth has softened considerably, although real estate agents were the worst faring industry group year-on-year. 

Meanwhile the ongoing rotation in employment from higher paying mining sector into other industries could potentially result in even weaker price pressures than implied by the headline result.

Recall from my recent post here that non-tradables inflation - which is often taken to be a reasonable proxy for domestic price pressures - fell to its lowest annual reading since some seventeen years ago in June 1999.

The wrap

Overall a soft headline result, though not entirely unexpected (it was forecast accurately by Westpac, 

AMP Capital joined other forecasters in predicting two further interest rate cuts to a cash rate of 1.25 per cent.