Wages And Jobs Hold Steady Despite Rising Inflation, CBA Data Shows

Australian wages grew 0.8 per cent over the March quarter, with annual growth holding at 3.1 per cent, according to the latest CommBank Wage and Labour Insights report.

The data, drawn from de-identified salary information across roughly 400,000 Commonwealth Bank accounts, suggests the jobs and pay outlook for Australian workers remains resilient despite ongoing conflict in the Middle East and persistent inflationary pressure at home.

Annual Wage Growth Appears To Have Found A Floor

CommBank Head of Australian Economics, Belinda Allen, indicated that wage growth has stabilised, with CBA’s proprietary data yet to reflect any response to tightening labour market conditions through late 2025 and into early 2026.

“The CBA Wage Insights series continues to show wages growth is steady heading into a period of higher inflation and inflation expectations due to the Middle East conflict,” Allen explained.

Annual wage growth has hovered between 3.1 per cent and 3.2 per cent since mid-2025, a range Allen described as a new baseline.

“The labour market remains on the tight side with the unemployment rate at 4.3 per cent according to ABS data,” she added. “However, according to CBA data, wages growth is finding a new base at around 3.1 per cent per year.”

Allen flagged that some loosening in the labour market is expected as economic growth slows through 2026, though CBA’s internal figures have not yet picked up a shift in that direction.

Western Australia Leads On Wage Growth For 15th Consecutive Month

State-level wage data painted a mixed picture for March.

Western Australia retained its position at the top of the wage growth table for the 15th month in a row. Wages in the state rose 3.9 per cent through the year, up from 3.8 per cent in February.

At the other end of the scale, Victoria and Tasmania recorded the equal slowest wage growth in the country, with both states experiencing a gradual softening over recent months.

New South Wales and the ACT were steady at 3.2 per cent and 3.5 per cent per year respectively. Queensland saw a slight acceleration to 3.3 per cent per year in March, while South Australia recorded wage growth of 3.4 per cent.

The divergence between states reflects varying exposures to sectors driving economic activity, with Western Australia’s resources sector continuing to underpin stronger pay outcomes.

Employment Remains Resilient With 23,000 Jobs Added In March

The CommBank Labour Insights series estimates that around 23,000 jobs were added in March, a slight increase from February. The data suggests employment growth is settling into a new baseline after a period of strength through 2024 and 2025.

Allen pointed to the resilience of the jobs market in the face of rising interest rates and geopolitical disruption.

“In the third month of 2026, employment as shown by CBA data remains resilient in the face of rising interest rates and the Middle East conflict,” she noted.

The unemployment rate sits at 4.3 per cent, a level CBA still considers to be on the tight side of the labour market.

Unemployment Expected To Rise From Here

Despite the steady readings, CBA expects the unemployment rate to climb in coming months. The trajectory, according to Allen, will depend on developments in the Middle East and the path of oil and refined product prices.

“We do expect the unemployment rate to lift from here, but the exact extent is contingent on the prospects of the proposed ceasefire and the level of oil and refined product prices we see moving forward,” Allen remarked.

She observed that CBA’s internal data does not point to a shift in trend in either direction for employment or wages at this stage.

“Our internal data does not point to a shift in trend in either direction now for both employment and wages, reinforcing the relatively stable environment we are seeing in the CBA Wage and Labour Insights series,” she added.

Inflation Remains The Key Variable

The report arrives at a time when inflation expectations are elevated, driven in part by energy price pressures linked to the Middle East conflict. While wage growth has remained contained, the interplay between sticky inflation and a tight labour market presents a challenge for policymakers at the Reserve Bank of Australia.

CBA’s data suggests employers have not yet responded to tighter conditions with higher pay offers, which may reflect caution about the economic outlook or a lag in wage-setting processes catching up to labour market signals.

For workers, the 3.1 per cent annual wage growth figure sits below current inflation, meaning real wages remain under pressure. Whether that dynamic shifts will depend on how quickly – or slowly – the labour market loosens in the months ahead.

Last Updated on April 13, 2026 by Nick Ross