* Q2 wage price index up 0.5 pct q/q, 2.1 pct y/y
* Record-low growth weighs on inflation, incomes
* Tentative signs wage downturn may have bottomed
By Wayne Cole
SYDNEY, Aug 17 (Reuters) - Australian workers saw wages grow at the slowest pace on record last quarter, a depressant for inflation and consumer spending that highlights the risk of yet more rate cuts in coming months.
Data from the Australian Bureau of Statistics on Wednesday showed its wage price index rose 0.5 percent in the June quarter, the third straight quarter of such meagre gains.
The annual rate stayed at 2.1 percent, a scrooge-like pace typically only associated with recessions rather than an economy growing around 3 percent a year as present.
Intense competition kept pay rises to 2.0 percent in the private sector and not a single industry, from mining to health care, paid more than 2.5 percent.
"Ultra-low wages growth reflects ongoing spare capacity in the labour market and low corporate revenue growth which is flowing through to low budgets for wages," said Shane Oliver, head of investment strategy at AMP Capital.
"The continuing weakness in wages and the risks it poses to inflation are consistent with our assessment that the RBA will cut rates again this year, probably in November."
The Reserve Bank of Australia (RBA) trimmed its cash rate a quarter point to 1.5 percent this month, warning that inflation could remain below target for another two years or more.
Markets 0#YIB: imply around a 56 percent chance of another easing by Christmas given the weak pulse in prices.
Underlying inflation slowed to a new trough of 1.5 percent in the year to June, well below the central bank's long-term target band of 2 to 3 percent.
Central to the subdued outlook was the prevalence of spare capacity in the labour market and its impact on wages. Labour costs, for instance, account for around half of final prices for market services, keeping inflation in that sector unusually low.
Expectations for future inflation had also fallen and were being built into pay negotiations, leading to a self-fulfilling cycle of wage deflation.
That was a major reason wage growth was much slower than what would normally be implied by an unemployment rate of 5.8 percent, the RBA said in its latest economic outlook.
Ivan Colhoun, chief markets economist at NAB, was tentatively optimistic wages could be on the cusp of a pick up.
He notes that NAB's long-running survey of Australian businesses has pointed to above trend employment growth for several months and a gradual tightening in the labour market.
Average wages offered by jobs advertised on SEEK, the country's biggest online vacancy site, had also started to creep higher, while the number of applicants per job had fallen.
"The latest NAB and SEEK data suggest the low point for wages growth may well have been reached, though it is too early to expect this to show up in this week's indicators," said Colhoun.