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This week, Westpac surveys provided insight into both the current conditions and outlook faced by consumers and manufacturers. The Monthly CPI Indictor and job vacancies subsequently provided more evidence of the persistence of Australia’s disinflationary trend.
In Australia, the week started with an encouraging development, the Westpac-MI Consumer Sentiment's headline index rose 6.2% to be at its highest level in over a year, albeit still almost 15% below the long-run average. A ‘trifecta’ of disposable income pressures – high inflation, elevated interest rates and a rising tax burden – have materially impacted household finances. But inflation’s ongoing deceleration towards target and the hoped-for consequence for interest rates – policy easing on the horizon – is now providing some relief.
In Australia, the November RBA meeting minutes presented a detailed account of the Board’s deliberations and their assessment of the risks. The Board recognised recent evidence that pointed to lingering resilience in the labour market and domestic demand, alongside the fact that the moderation in underlying inflation is tracking a slower pace than expected. These developments have renewed concerns over inflation expectations, with the Board noting “growing signs of a mindset among businesses that any cost increases could be passed onto consumers”, a worrisome development given that only ...
A female is likely to be appointed as the central bank’s deputy governor for the first time, with assistant governor Michele Bullock among the leading options.