Housing finance falls, whilst pressure on wages wavers

Figures released yesterday covering both wages and housing finance confirmed the current outlook for the economy, giving no rise to fears of either a slump or a blow out in the foreseeable future.

On the wages front the ABS released the Wage Cost Index, which showed that wages rose by just 0.6% in the December quarter, or 3.1% over the year. Inflation seems safely boxed up for the time being as a result.

With employment improving, but unemployment still high at 7 to 8%, the wages figures are unlikely to blow out. US wages figures are even showing that with relatively low unemployment, wages and therefore inflation seem under control.

On the housing side, finance approval figures showed a flat but slowing trend, with January lending down by 0.4%.

With economists waiting for the slump they were all predicting for most of last year, there will be few calls for changes to interest rates from the RBA on yesterday’s figures.

A closer guide to future interest rate moves may come from RBA Governor Ian MacFarlane when he delivers a speech in Japan tonight.