However, pay rises in the capital's government sector remained relatively small, despite another increase in the rate of public servants' salary growth.

Annual wage growth in the ACT has been below the national average for more than three years.

But the latest data, released on Wednesday, shows the capital's labour market is catching up.

Across Australia, salaries rose 2 per cent in the year to September, the lowest level since the Bureau of Statistics' wage price index began in 1998.

In Canberra, wages rose 1.9 per cent.

The difference between business and government was significant: private sector pay in the ACT increased by 2.2 per cent (compared with 1.9 per cent nationwide), while public sector pay in Canberra rose 1.8 per cent (2.3 per cent nationwide).

Canberra's private sector pay growth outperformed all markets except Tasmania's, while the ACT's public sector result was the nation's worst.

However, government pay in the capital is climbing out of the slump that began just before the election of the Abbott government, which effectively froze wages in the public service.

The poor national result suggests there is still plenty of slack in the jobs market despite a low jobless rate of 5.6 per cent.

Australia's disappointing data contrasts starkly with a strong upswing in wages in the United States, where the median worker's pay rose by 3.9 per cent over the year to October, the fastest growth rate in 10 years.