Australian labour market will cool further

Data published by Australia's Fair Work Commission revealed that pay hikes under enterprise bargaining agreements (EBAs) soared to a new high in the first fortnight of August. However, the share of employees covered under the most recent EBAs was relatively small, meaning that those pay increases will have a minor impact on the overall stock of wages. In any case, the latest labour force data suggest that spare capacity is in fact opening up in the labour market. And as resurgent net overseas migration continues to boost the labour supply, wage pressures should dissipate before long.