Wage pressure remains acute

ISRAEL - In Brief 04 Sep 2023 by Jonathan Katz
Wage pressure remains acute The average nominal wage increased by 6.0% y/y in June and by 6.2% in July (initial estimate). Trend data point to wage acceleration in the Q2 to an annual pace of 7.7%, especially in food and accommodation and manufacturing. The labor market remains tight (3% unemployment in the prime age group of 25-64) and this is supporting wage pressure, despite the decline in job vacancies. This trend is expected to keep core inflation elevated, supportive of another rate hike by the end of the year. Meanwhile, the shekel continues to weaken today, which has been a steady trend recently and also increases the probability of another rate hike if not today, then on October 23rd.

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