Australian workers' wages have continued to stagnate below long-term growth rates and, if anything, have showed signs of further weakness, with average pay packets rising just 2.2 per cent over the year.

Key points: Wage growth edged down again in September quarter and was largely propped up by public sector health sector pay increases

Wage growth edged down again in September quarter and was largely propped up by public sector health sector pay increases In the private sector, the largest wage rises were recorded in accommodation and food services (+1.7pc) over the quarter, while the financial and insurance sector (+0.2pc) saw the weakest growth

In the private sector, the largest wage rises were recorded in accommodation and food services (+1.7pc) over the quarter, while the financial and insurance sector (+0.2pc) saw the weakest growth While in line with RBA forecasts, the weak result increases the pressure to cut rates again

In seasonally adjusted terms, wages rose by 0.5 per cent in the September quarter, down from 0.6 per cent in the June quarter, and taking year-on-year growth down from the 2.3 per cent recorded in the last figures.

Wage growth continues to be mired well below the long term average of 3.2 per cent, a level not seen since late in 2012.

"The rate of annual wage growth eased slightly in September after being stable over the past year, continuing to grow at a slightly faster rate than consumer prices over the past year," Australian Bureau of Statistics chief economist Bruce Hockman said.

"The largest contribution to wage growth over the quarter was jobs in the health care and social assistance industry."

That result can be seen with public sector wage growth (+2.5 per cent) continuing to outpace the private sector (+2.2 per cent).

The results are particularly disappointing as the September quarter numbers generally reflect new enterprise bargaining agreements (EBAs) as well as the Fair Work Commission's annual wage review.

AMP's Shane Oliver said if it hadn't been for solid increases in the minimum wage in recent years, the result would be even more dire.

"However, this year's increase in the minimum wage fell back to 3 per cent and this partly accounts for the fall back in wages growth … with potential for a bit more of a drag to impact in the December quarter," Dr Oliver said.

"Were it not for the acceleration in minimum wages growth since 2016, wages growth overall would be running around 2 per cent year-on-year. In other words, underlying wages growth remains very weak."

Key sectors the weakest

Worryingly six of the biggest employers — including the retail, manufacturing and construction sectors — saw yearly wage increases below 2 per cent, barely above the current rate of inflation of 1.7 per cent.

"Private sector wages, which better reflect market forces and economic conditions, remain weak across the board," Indeed Asia-Pacific economist Callam Pickering said.

ANZ's Catherine Birch said the slowdown in wage growth was not unexpected, but it will put further pressure on household incomes.

"What's concerning for households is that the RBA expects no material improvement in wage growth within the next two years."

If there was a positive in the numbers, it was the continuing trend of employers paying higher bonuses.

Bonus payments rose 1.3 per cent over the quarter, and wages with bonuses included are growing at 2.8 per cent per annum.

"Employers may be becoming more inclined to make pay rises conditional and avoid being locked into increases should their operating environment sour," RBC economist Su-Lin Ong said.

Victoria reported the strongest wage growth over the year, up 2.8 per cent, although a large part of that was driven by large pay increases awarded to public sector workers in the June quarter.

News South Wales wages grew by just 2.2 per cent, despite a solid increase in public sector wages, while Western Australia still endured the weakest result, with pay packets up just 1.6 per cent — a level it has been stuck at for 5 consecutive quarters.

Citi economist Josh Williamson said weak wages growth stuck around current levels will do little to fire up consumer spending.

"Previous periods where the unemployment rate was around 5.2-to-5.5 per cent would have been associated with private wage cost index growth around 3.5 per cent, well above the current growth rate," Mr Williamson noted.