Melbourne Institute inflation hits record low

The Melbourne Institute monthly inflation gauge is out and setting records to the downside:

May Apr. Mar. Feb. Jan. Dec. Nov. Oct.
2016 2016 2016 2016 2016 2015 2015 2015
===========================================================================
—————— Inflation Gauge ——————
MoM % change -0.2% 0.1% 0.0% -0.2% 0.4% 0.2% 0.1% 0.0%
3-mo annualized -0.1% -0.2% 0.1% 0.4% 0.7% 0.3% 0.4% 0.4%
12 months ago 1.0% 1.5% 1.7% 2.1% 2.3% 2.0% 1.8% 1.8%
——————- Trimmed Mean ——————–
MoM % change* -0.2% 0.2% 0.0% -0.1% 0.2% -0.1% 0.0% 0.0%
3-mo annualized -0.1% 0.0% 0.1% 0.6% 0.5% 0.1% 0.4% 0.4%
12 months ago 1.0% 1.5% 1.6% 1.7% 2.0% 1.7% 1.6% 1.7%
————- Direction of Price Change ————-
Net balance -9 -5 -11 -4 38 -3 11 -7
Increase 22 24 18 24 47 22 29 22
Decrease 31 29 29 28 9 25 18 29
No change 34 34 40 35 31 40 40 36

Be aware that in recent months the monthly inflation gauge has been running ahead of the CPI so this could be some give back or a signal that the disinflation is intensifying. I will have more on this later.

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About the author

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.