Trimmed mean consumer inflationary expectations were flat in Feb at 2.3%yr compared to 2.1%yr in Dec and 1.9%yr in Nov. Expectations have lifted from the equal record low print of 1.5%yr in Sep 2013.
• As such the trend continues to drift higher; 2.2%yr in Feb from 2.1%yr in Jan and Dec (Dec was originally 2.0%yr) and is edging back towards the recent peak of 2.4%yr in May 2013.
• However, the median expectations for managers & professionals continue to rise lifting to 2.9%yr in Feb, from 2.6%yr in Jan, 2.3%yr in Dec and 2.0%yr in Nov. These expectations are now not far off the recent high of 3.1%yr last Jul. Expectations for managers are higher than the median for all households (2.3%yr). The trend for managers & professional continues to rise; 2.6%yr in Feb from 2.5%yr in Jan, 2.3%yr in Dec & Nov and 2.2%yr in Oct.
• The drift higher in inflationary expectations is consistent with the higher than expected 2014Q1 CPI print.
Still spectacularly contained versus the “Bubbles Macfarlane” era.
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.
