Wages growth held steady at 3.4 per cent in the year to September, in line with economist and RBA expectations, the Australian Bureau of Statistics reported on Wednesday.
But signs suggest the momentum in the labour market is slowing.
Growth was mainly driven by public sector wages, which grew by 3.8 per cent, and particularly by state governments.
"State government pay rises contributed 82 per cent of public sector wage growth this quarter," the bureau's head of prices statistics Michelle Marquardt said.
Private sector growth slowed from 3.4 to 3.2 per cent and was boosted by the Fair Work Commission's decision to grant a 3.5 per cent increase to workers on the national minimum and award wages in July.
The healthcare and social assistance sector outperformed the rest of the market, rising 1.5 per cent over the quarter compared to a broader rise of 0.8 per cent.
But wage growth in private sector jobs under individual arrangements slowed, NAB senior associate economist Jessie Cameron said.
"At face value, the private sector outcome mitigates some fear around an overly tight labour market," she said.
AMP economist My Bui said indicators such as employment surveys pointed to a slight deterioration in the labour market.
"Ultimately, private sector wages are the biggest driver of market services inflation (as it is a cost to private businesses that is passed on to consumers), so slower momentum in the private sector means that the outlook for this 'sticky' inflation category is down," she said.
"We continue to see that the bar for a rate cut is very high from the RBA, given recent strong outcomes in the inflation rate for the September quarter.
"But there is room for another cut next year in May and today's wages data underscores our view that wages, inflation, and the labour market 'tightness' will all ease from here."
Minutes from the RBA's Melbourne Cup day board meeting, released on Tuesday, revealed the central bank was concerned about high growth in unit labour costs making it harder to get inflation back under control.
Inflation unexpectedly shot up to 3.2 per cent in the September quarter, causing traders to all-but give up hope for more rate cuts in 2025 or 2026.
While annual real wages grew for an eighth straight quarter, the jump in inflation eroded the improvement to workers' incomes from 1.3 per cent to 0.2 per cent.
"This is now the longest period of consecutive annual real wage growth in almost a decade," Treasurer Jim Chalmers said.
"This is an encouraging outcome that shows our policies to deliver higher wages for workers are paying off for hardworking Australians.
"This latest data shows enterprise agreements continue to be a key source of wages growth for Australian workers - which is why our efforts to boost bargaining are so important."
Opposition housing spokesman Andrew Bragg said the economy was too reliant on jobs growth from the non-market sector, rather than the private sector.
"Unemployment is actually up compared to where the government started when they were elected back in May 2022, so there are fewer Australians in work," he said.
ABS labour force figures showed a record high 14,683,200 Australians were employed in October.
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