But the figures showed few signs of softening in the economy and confirmed that there was no urgent need for the Reserve Bank to ease monetary policy.

Speculation about a local rate cut heated up again this week when the US Federal Reserve delivered its third easing within a few short weeks to bolster the US economy, but most analysts expect the RBA to wait till early next year before moving.

New data on Thursday showed company profits, especially in the manufacturing sector, were being squeezed. The Bureau of Statistics said third-quarter profits before tax, interest and depreciation fell 2.2 per cent compared with expectations for a flat outcome.

Analysts attributed the fall to troubles in Asia and growing pressure on the margins of importers, who have been unable to pass on higher costs associated with the recent fall inthe Australian dollar.

"While the economic turmoil in Asia has reduced some companies' profitability, this has been offset by robust domestic demand," said Nomura Australia senior economist Andrew Pease, noting the decline followed several quarters of strong growth.

"Today's weaker result may be a reflection of profit margins being squeezed by higher import prices as competition prevents firms from passing on higher costs to consumers," he said.

Meanwhile, average weekly ordinary time earnings (AWOTE) for the three months to August were revised up to 1.8 per cent from 1.7 per cent, taking annual wages growth to 4.2 per cent. That is near the top of the Reserve Bank's "comfort zone" of 3.5-4.5 per cent wages growth, but is not believed to be a worry for the central bank and wouldn't stand in the way of a rate cut.

Deutsche Bank economists said in a research note that the underlying pace of wages growth is higher than they thought, but it still did not pose any serious threat to the RBA's inflationobjective because even with signs of a slowing, productivity growth remained strong enough to keep unit labour costs in check.

The closely watched private sector wages rose 1.5 per cent, with annual growth declining to 4.1 per cent from 4.6 per cent.

The AWOTE figures are volatile, and in its latest economic assessment released last week the RBA pointed to other wage cost indicators that suggested the AWOTE series may have been overstating the overall rate of wage increases. The new wage cost index is running just below a three per cent annual pace.

"While there's no threat to the inflation outlook from wages, it's still surprising that they're so high, given the level of growth and deflation in the world economy," said Colonial State Bank economist Richard Grace.