Australian wages rose 0.8 per cent in May, maintaining the consistent growth recorded over the past 18 months, according to the latest Commonwealth Bank Wage and Labour Insights, a monthly report tracking pay and employment conditions across the economy.
Annual wage growth for May was steady at 3.1 per cent a year, unchanged from April and despite a spike in the unemployment rate to 4.5 per cent in April.
“Wages growth has been remarkably stable in recent months, and our May data continues to point to a steady state,” said Harry Ottley, Economist at CBA.
“There is still no clear sign that higher inflation is translating into stronger wages growth, with labour market conditions remaining relatively balanced.”
Employment growth remains solid
Employment growth also remained resilient in May. The economy added around 23,000 jobs during the month, according to CBA estimates.
“Employment growth was steady in May, and at this early stage the labour market appears resilient in the face of higher interest rates and the impacts of the Middle East conflict,” said Ottley.
“However, the rise in the unemployment rate suggests some potential weakness. As the economy slows, we expect employment growth to remain subdued through 2026, with the unemployment rate edging higher to a peak of around 4.6 per cent.”
July pay rises expected to lift momentum
Looking ahead, wages growth is expected to strengthen later in 2026 as several large enterprise agreements and the 4.75 per cent increase to minimum and award wages from July put upward pressure on wage rises.
Enterprise agreements are negotiated pay deals that cover large groups of workers, often in the public sector, meaning pay rises can lift wages across the economy when they come into effect.
In coming months, this is expected to include a large increase to wages for NSW nurses, although the exact timing remains uncertain.
“As a result, we should see some upward pressure on wages growth in coming months, but for now wage inflation remains contained,” said Ottley.
Western Australia leads state wage growth
At the state level, Western Australia again recorded the strongest wages growth in the country at 3.8 per cent annual growth in May.
South Australia and the Northern Territory followed at 3.6 per cent, while Tasmania recorded the slowest growth at 2.9 per cent. Wages growth in NSW, Victoria and Queensland has remained broadly stable so far in 2026.
Read the full Commonwealth Bank Wage and Labour Insights report here.
