In June, Australians expected annual inflation of 3.8% over the next two years as the RBA cut interest rates to a record low 1.25% in the first week of June. This is down 0.3% on May and down a significant 0.7% on a year ago in June 2018.
Inflation Expectations have decreased around Australia in June, and are down compared to a year ago, led by declines for both employed and unemployed Australians as well as across different occupations and employment categories.
Inflation Expectations fell in June as the RBA commenced an interest rate cutting cycle. The RBA’s decision to cut interest rates in June was the first cut announced by Australia’s central bank since a similar cut nearly three years ago in August 2016.
Inflation Expectations in June are based on personally interviewing a nationwide representative sample of 3,984 Australians aged 14+ face-to -face in their own homes…
Inflation Expectations driven lower by self-employed and skilled/unskilled workers
Analysing Inflation Expectations in Australia shows falls across the board for different occupation types and employment categories over the past year however the biggest falls have been for the self-employed and for skilled/unskilled workers.
Inflation Expectations for employed Australians for June 2019 dropped to only 3.6%, down 0.7% on a year ago. Inflation Expectations also declined for Australians that are not employed – including retired Australians, students, those on home duties, those choosing not to work and the unemployed – down by 0.6% to 4.2%.
Analysing Inflation Expectations by employment category shows that Inflation Expectations for self-employed Australians dropped significantly, down 1.4% to only 3.1% and now the lowest of any occupation or employment category measured.
Inflation Expectations also fell for Australians in public sector employment by 0.5% to 3.4% in June 2019 and for Australians in the private sector by 0.7% to 3.7% compared to a year ago.
Analysing Inflation Expectations by occupation type shows Inflation Expectations for skilled Australians fell by 1.2% to 3.5% over the last year and were down 1.2% to 3.9% for semi/unskilled Australians…
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
