The Melbourne Institute Inflation guage gauge is produced monthly
The official data from the Australian Bureau of Statistics is only once a quarter so this is used as a bit of a gap fill waiting the official data (next report from the ABS on CPI is due in April FFS)
For January:
headline CPI -0.1% m/m
- prior 0.4%
and 1.5% y/y
- prior 1.9% y/y
Trimmed mean comes in at -0.1% m/m and 1.4% y/y
- priors were 0.2% m/m and 1.8% y/y
Oh dear … the RBA (if anyone there is reading this data point) will not be overly happy. The target for core inflation (trimmed meand a proxy for that) is 2 to 3% y/y. So, way belwo target … which is nothing new. Its been below target for a long time (I posted on this last week).
The RBA has two jobs (their mandate) , which in a nutshell are full employment and price stability.
- On employment, to the extent their policy has had an impact kudos to them, jobs growth is doing OK (notwithstanindg much of it part-time and still significant underemployment out there)
- But on inflation …. missing target for going on 3 years is not well done. It argues for lower rates. Rates are pretty much the only lever the RBA has, to not use them toward achieving one's target may appear as carelessness.
Still, its not to late RBA! The year's first meeting for the year is tomorrow. If history is anything to go by (this mob haven't done anything in 2+ years) it'll be on hold.
