Australia’s wage growth continues to flatline at an annual pace of 2.3 per cent, propped up by a surprise lift in public sector pay.

Over the June quarter, the seasonally adjusted wage price index rose by 0.6 per cent, with a 0.8 per cent increase in the public sector more than compensating for a disappointing 0.5 per cent increase in the private sector.

“The most significant contribution to wage growth this quarter came from the public sector component of the health care and social assistance industry, where a number of large increases were recorded in Victoria under a plan to ensure wage parity with other states,” Australian Bureau of Statistics chief economist Bruce Hockman said.

Healthcare workers are leading the pack on wage increases, seeing their pay packets (excluding bonuses) up 3.3 per cent for the year.

Where you are looking for work also is a big determinant on wage growth, with Victoria continuing to outpace the likes of Queensland and NSW – both sitting on the national average of 2.3 per cent growth.

Victorian workers continue to enjoy the strongest wage rises, up 0.7 per cent over the quarter and 2.9 per cent for the year.

South Australia, Tasmania and the Northern Territory recorded the lowest quarterly rise of just 0.2 per cent, although Western Australia brings up the rear in annual terms with wages growing a weak 1.6 per cent.

Asia-Pacific economist at global job site Indeed, Callam Pickering said wage growth remains quite low across almost every state and industry, with only small pockets of genuine improvement.

“The one saving grace for households is that inflation has been even lower than wage growth,” Mr Pickering said.

“Adjusted for inflation, wages rose by 0.8 per cent over the past year. For context, real wage growth has averaged just 0.2 per cent over the past six years.”

Mr Pickering said it was unlikely wages would pick up much in the short term, given the slackness in the jobs market.

“With the unemployment rate at 5.2 per cent and underutilisation rate at 13.5 per cent there is still a huge amount of slack across the labour market, ” he said.

“The underutilisation rate needs to ease towards 12 per cent before wage growth of 3 per cent or higher is likely. That won’t happen overnight nor is it likely within the next year.”

Consumers a bit happier

While there was little evidence of the economy shifting gears on wages, at least consumers are feeling a bit more upbeat.

The Westpac-Melbourne Institute survey found consumer sentiment jumped almost 4 per cent to 100 points – exactly the pivot between net optimism and pessimism.

It follows a marginal uptick in NAB’s business confidence survey, although both confidence and conditions in the business world remain below their long term averages.

The consumer result was surprisingly positive given households were surveyed last week, just as US-China trade relations deteriorated further, the Australian dollar tumbled to a decade low and the ASX shed more than 3 per cent.

However, Westpac chief economist Bill Evans said the sharp decline in July may have been a result of households being spooked by successive rate cuts from the Reserve Bank and fear the economy was far weaker than expected.

Households, though, have a bit of a way to go before they could be described as optimistic – comparisons with a year ago and views about the future are still well below the 100-point mark.

“The muted gains are despite further signs of improvement in Australia’s housing market and the Federal Government’s tax relief, which may be starting to see cash flow to some households,” Mr Evans noted.

“A major influence on the near term economic outlook is going to be the mix between spending and saving as households receive their increased tax rebates.

“With sentiment flat and households remaining risk averse we expect consumers to favour saving over spending, so this lift in ‘time to buy’ is an encouraging sign for retailers.”

Citi’s Josh Williamson said the small rise in consumer sentiment was better late than never.

“However, we believe this is a poor return for 50 basis points of rate cuts and government tax rebates,” he said.

-ABC