Inflation expectations bounce back from record low

From Roy Morgan Research:

In October Australians expected inflation of 3.5% annually over the next two years, up 0.2% points from September and now up 0.3% points on the record low in August. However, Inflation Expectations are still a significant 0.5% points below the pre-pandemic month of March 2020.

The opening up of Australia continued during October with Victoria finally exiting a 16-week lockdown late in the month and border restrictions between various States being relaxed. Inflation Expectations increased in all States since August except Victoria which has the lowest in the nation at only 3.2% (unchanged).

On a State-based level Inflation Expectations are now highest in Tasmania at 4.4% in October, up 1% point since August ahead of NSW on 3.7% (up 0.4% points) and WA on 3.7% (up 1% point).

Inflation Expectations are in line with the national average in Queensland at 3.5% (up 0.1% points) and just below that in SA at 3.4% (up 0.2% points).

On a regional basis Inflation Expectations are higher, and have increased further since August, in Country Areas and are now at 3.8% (up 0.3% points) compared to 3.3% in Capital Cities (up 0.2% points).

Later today we’ll get wage growth data for September from the ABS.

Unconventional Economist

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