Market services Labour costs comprise about 40 per cent of final market services prices, which means that wages growth is a key determinant of the pace of market services inflation. Market services inflation and wages growth were both growing strongly in the run-up to the terms of trade peak in 2011 (Graph 12).
More recently, wages growth has been subdued, and this has been a significant factor contributing to the slower pace of market services inflation. http://www.rba.gov.au/speeches/2018/sp-dg-2018-08-22.html  14/23  22/08/2018  Low Inflation | Speeches | RBA  Graph 12  There have also been a number of idiosyncratic developments that have weighed on market services inflation in recent quarters.