Real wages won’t turn positive until mid-2027, according to the Reserve Bank of Australia’s latest forecasts, in a blow to household budgets and the Albanese government’s claim of delivering above-inflation pay gains for workers.
Economists say the failure of wages to keep pace with consumer prices is a necessary part of bringing inflation under control, but it will make households cool their spending on discretionary goods and services this year.
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John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com
Lea Jurkovic is The Australian Financial Review’s economics correspondent, based in Canberra.
Luke Kinsella is a journalist based in The Australian Financial Review’s Sydney office. He was previously a policy analyst at Treasury. Email Luke at luke.kinsella@nine.com.au