/www.bloomberg.com/ By Victoria Batchelor
Sydney, Nov. 11 (Bloomberg) -- Australian wages growth probably accelerated in the third quarter as companies paid more to attract workers as the unemployment rate fell.
Hourly rates of pay, excluding bonuses, probably rose 1.1 percent in the third quarter from the previous three months, according to a Bloomberg News survey of 18 economists. That follows a 0.6 percent rise in the second quarter. The statistics bureau releases its wage cost index at 11:30 a.m. Sydney time on Wednesday.
The economy is growing almost 4 percent annually, buoyed by higher consumer spending and a residential construction boom. That's fueled demand for workers and boosted pay. Still, the increase in wages probably isn't enough to fuel inflation or cause the Reserve Bank of Australia to increase interest rates, analysts say.
``From the Reserve Bank point of view, I don't think the wages rise will be enough to worry them very much,'' said Michael Blythe, chief economist at Commonwealth Bank of Australia.
``From the market perspective, they think the Reserve Bank's on hold for the foreseeable future,'' Blythe said. ``It would take something pretty dramatic to change that view.''
The central bank has keep its benchmark interest rate unchanged at 4.75 percent the past five months because slowing global economic growth is cutting exports and a drought is hurting the farming industry.
The bank will keep rates unchanged until at least March 2003, according to the median forecast in a Bloomberg News survey of 23 economists.
Fueling wages, the jobless rate in October fell to a two-year- low 6 compared with 7 percent at the beginning of the year. The economy, which grew 4.2 percent in the first quarter from a year earlier, has added 88,200 jobs this year.
Little Threat
``The wage cost index is not seasonally adjusted and in September every year it tends to jump up a bit,'' Blythe said. ``That's partly because it's the start of the financial year and people's wages are adjusted.''
Wages are expected to rise 3.1 percent in the third quarter from the same period a year earlier, the survey showed. The Reserve Bank of Australia has previously indicated that annual wage growth of less than 4.5 percent poses little threat of inflation.
The statistics office will release a separate measure of wages at 11:30 a.m. Sydney time on Thursday. That is expected to show average weekly earnings also rose 1.1 percent in the three months ended mid-August, according to a Bloomberg News survey of eight economists.
The Australian Bureau of Statistics has said the average weekly wages report is a less-reliable measure of underlying wage growth because it is distorted by changes in the composition of the workforce and tends to be volatile.
Bloomberg Survey