The RBA,whichheld the cash rate steady at 4.35 per cent at its final meeting of the year on December 5,has been concerned that the nation’s tight jobs market will contribute to strong wages growth that in turn would add to inflationary pressures.
But the Employment Hero measure of activity across the small- and medium-sized business sector,to be released on Tuesday,showed the first drop in wages since May. Healthcare,IT,manufacturing and logistical businesses all reported falls of at least 0.4 per cent through last month.
While median hours increased marginally,there are now sharp falls occurring in the retail,hospitality and tourism sectors,with a 3.2 per cent decline over the past three months. The number of employees is also flat-lining after months of strong growth.
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Employment Hero chief executive officer Ben Thompson said the slowdown in wages growth,and now the actual drop in small and medium-sized businesses,suggested the economy had reached a turning point.
“As the data shows wage growth is flattening to align with inflation,the RBA must consider halting interest rate increases for at least the near term,” he said.
“Our data indicates that the economy will continue to cool off as we head into 2024. It is likely that mid next year,we’ll see SMEs[small and medium-sized enterprises] cutting back on hiring and growth plans as the economy potentially enters a small recession.”