Westpac’s Inflation Expectations figures are out and there’s no upside brewing on this front:
Median consumer inflationary expectations were flat at 1.8%yr in Nov just a small increase on the almost record low print of 1.5%yr in Sep. The only lower print was 1.4%yr in Jul 1993.
The trend continues to drift down, from 2.0%yr in Aug to 1.9%yr in Sep, 1.8%yr in Oct and now 1.7%yr in Nov.
The median expected inflation rate of managers & professionals eased back to 2.0%yr from the small bounce to 2.5%yr in Oct. Expectations of managers & professionals is again not far off the record low of 1.5%yr in Sep and still less than prints of 2.7%yr in Aug and 3.1%yr in Jul. As such, its trend is also drifting down, from 2.6%yr in Jul to 2.5%yr in Aug, 2.4%yr in Sep, 2.2%yr in Oct and now 2.1%yr in Nov.
Overall consumer inflationary expectations are holding below 2%, while those who are likely to be closer to price setting arrangements their expectations have drifted down to the lower half of the RBA target band.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
