Inflation expectations lowest in 32 months

2 months ago 2

Inflation expectations ease

While the shots continue to be fired between the Australian government and the central bank, in real time there appears to be a growing risk of the economy sliding into the mire.

The NAB Survey is arguably the closest we have to a real-time read on the state of play, and business conditions slipped by another -3 points to a reading of just 3 index points.

Business also confidence fell almost across the board, with particularly weak confidence in the retail sector notable, and the overall reading for confidence fell by -5 points to a negative reading of -4 index points.

Source: NAB

Forward looking indicators continue to look moribund, too.

The monthly figures for prices tend to bounce around a lot, but the trend is clearly lower, and the figures for output prices have returned to long-term averages (while still trending lower).

Source: NAB Survey

Indeed, in separate news, AN-/Roy Morgan's consumer confidence survey for September showed inflation expectations falling to a 32-month low of 4.6 per cent.

That's broadly consistent with hitting the inflation target (indeed, consumer price inflation was under target through 2018 until 2021):

Overall, the NAB Survey made for pretty morose reading, foreshadowing a slowdown in hiring and wages growth, and the risk of rising unemployment as the economy stagnates further.

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