INFLATION (FINANCE) – AUSTRALIA

Taste of deflation as CPI plunges

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Original article by Sarah Turner
The Australian Financial Review – Page: 6 : 27-Jul-20

The economic impact of COVID-19 will be reflected in the consumer price index data for the June quarter, which will be released on 29 July. The consensus forecast is for a two per cent fall in the quarter and an 0.5 per cent decline in the year to June. However. Westpac economists expect the CPI to have declined by 2.4 per cent for the quarter and 0.9 per cent over the year. The coronavirus lockdown reduced demand for a range of goods and services in the three months to June, including petrol and travel.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC

Inflation Expectations down to new record low in June of 3.2%

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Original article by Roy Morgan
Market Research Update – Page: Online : 13-Jul-20

In June, Australians expected inflation of 3.2% annually over the next two years; this result signified a new record low for the index – down 0.1% points on May and 0.8% points on the pre-COVID period of February 2020. Inflation Expectations have declined around the nation; however, the magnitude of the drop has been far larger in some places than others – notably Melbourne where Inflation Expectations have dropped 0.9% points since February to only 2.8% in June. The biggest decline has been in Tasmania, down from 4.9% in February to 2.9% in June, as Hobart’s formerly hot housing market has cooled during the COVID-19 pandemic. Adelaide experienced the least change, with Inflation Expectations of 3.7% in June down only 0.1% points since February, while expectations in Brisbane, Sydney and Perth are down by 0.5-0.6%. Roy Morgan CEO Michele Levine says the rapid decline in Inflation Expectations in recent months is a sign of ongoing economic weakness as Australia experiences its first recession for three decades.

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ROY MORGAN LIMITED

Inflation Expectations reach an all-time low in May

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Original article by Roy Morgan
Market Research Update – Page: Online : 17-Jun-20

In May, Australians expected inflation of 3.3% annually over the next two years, down 0.3% points on April and 0.7% points on the pre-COVID period of February 2020. Analysing the different Inflation Expectations by home ownership status shows declines across the board over the last few months. The sharpest decreases in Inflation Expectations were for renters, down 1.0% point from February to 3.6% in May. However, renters still recorded the highest expectations for inflation compared to people who own their homes outright and those who are paying off their homes. Individuals who own their homes outright reported an Inflation Expectation of 3.3% in May, down 0.5% points on February; and mortgagors paying off their homes reported Inflation Expectations of only 2.9%, down 0.8% points on pre-pandemic February. Roy Morgan CEO Michele Levine says with Australia entering a recession, it is not surprising to see marked declines in Inflation Expectations over the last few months.

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ROY MORGAN LIMITED

Inflation expectations are higher for women than men of all ages

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Original article by Roy Morgan
Market Research Update – Page: Online : 12-May-20

In April, Australians expected inflation of 3.6% annually over the next two years, down 0.4% on March as the impact of COVID-19 hit the Australian economy. Beneath the headline figure for April there are significant differences between key demographics, including women and men. Women expect price increases of 4.2% per year over the next two years while men expect prices to increase by 3%. This gap is evident for all age groups and most pronounced for those aged 50-64. Women aged 50-64 expect inflation of 5.2% – higher than any other age group, while men expect inflation of only 3.2%. Longer-term trends show the inflation expectations of women average being 0.8% higher than men. Another trend we see consistently is higher inflation expectations for older Australians aged 50+ compared to those under that age, which is confirmed by the latest April figures. Roy Morgan CEO Michele Levine says the disparity between the inflation expectations of women and men is consistent, and even during the COVID-19 pandemic this trend continues.

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ROY MORGAN LIMITED

Inflation to rise ahead of plunge

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Original article by Matthew Cranston
The Australian Financial Review – Page: 6 : 28-Apr-20

The travel and accommodation sector is likely to be among the hardest hit when inflation data for the March quarter is released on 29 April. The inflation figures will reflect the impact of the bushfires and the early stages of the coronavirus crisis. The market consensus is for a headline inflation rate of 1.9 per cent for the year to March, while the Commonwealth Bank has forecast that inflation will reach two per cent for the first time since mid-2018. However, economists generally expect a negative inflation rate in the June quarter, a view shared by Reserve Bank governor Philip Lowe.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA

Inflation expectations down significantly in mid-April

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-Apr-20

In mid-April there was a jolt to Australian Inflation Expectations, with a steep fall in the weekly index on April 18/19 to a record low of only 3.1%, down from 3.8% the week before and significantly below the 2020 weekly average of 4%. The weekly fall was caused by fewer Australians expecting prices to increase over the next two years, down to 69.4% (down 1.4% on a week ago) and more expecting prices to either decrease (up 1% to 10.8%) or ‘Stay the same’ (up 0.4% to 19.8%). Roy Morgan CEO Michele Levine says the steep drop in Inflation Expectations in mid-April comes as the impact of the COVID-19 pandemic begins to hit key pricing metrics in the economy.

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ROY MORGAN LIMITED

Economy to contract almost 4pc in 2020

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Original article by Sarah Turner
The Australian Financial Review – Page: 1 & 23 : 6-Apr-20

The median forecast of economists is that the Australian economy will contract by 3.9 per cent in calendar 2020, and by 1.1 per cent in the year to 30 June. The quarterly survey of economics also shows that the economy is expected to contract by 1.5 per cent in 2020-21, while economic growth is not forecast to rebound from the coronavirus until the end of 2021. Meanwhile, economists generally expect the unemployment rate to peak at 8.5 per cent by the end of June 2020, compared with 5.1 per cent at present. The inflation rate in turn is forecast to be 1.4 per cent in June, falling to 1.25 per cent by the end of the year.

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Inflation expectations much higher among ALP supporters than Liberal, National or Greens supporters

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Original article by Roy Morgan
Market Research Update – Page: Online : 25-Feb-20

Australians aged +14 expect inflation of 3.9% annually over the next two years, according to the Roy Morgan Inflation Expectations Index for January 2020. This is a slight decrease of 0.1% on December, but down 0.3% on a year ago. This is the lowest expectation of future price increases to start a year since the series began in 2010, and compares to price expectations of 6.6% annually over the next two years in January 2011. Comparing price expectations by Federal voting intention shows that the highest price expectations are held by those voting for Independents/Others at 4.4% annually over the next two years, equal to those who can’t say who they would vote for (also 4.4%). In terms of supporters of the major parties, ALP supporters expect annual price increases of 4.1% over the next two years which is slightly higher than the national average of 3.9% and significantly higher than both L-NP supporters on 3.5% and Greens supporters on 3.7%. January Inflation Expectations are based on personal interviews with a nationally representative sample of 4,052 Australians aged 14+.

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ROY MORGAN LIMITED

Rate cut chances tumble on inflation rise

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Original article by Adam Creighton
The Australian – Page: 2 : 30-Jan-20

Official data shows that headline inflation rose 0.7 per cent in the December quarter, compared with 0.5 per cent in the three months to September. The annual inflation rate rose to 1.8 per cent. Factors such as higher prices for fruit, meat and petrol contributed to the increase in the inflation rate. Ben Udy of Capital Economics says the CPI data should ensure that the Reserve Bank of Australia leaves the cash rate on hold in February. The central bank expects core inflation to rise to 1.8 per cent by the end of 2020.

CORPORATES
CAPITAL ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS

Price expectations much higher for Young Parents than Young Couples with no children

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Original article by Roy Morgan
Market Research Update – Page: Online : 30-Jan-20

Australians as a whole expect prices to increase by 4% annually over the next two years, according to Roy Morgan surveys conducted in December. This is a slight increase of 0.1% on expectations in November, but down 0.2% on a year ago. Comparing price expectations by Household Life-Cycle shows that Young Parents expect prices to increase by 4.5% annually over the next two years – higher expectations than that of any other household type. In contrast, Young Couples who have no children expect price increases of only 3.3% per year. Most Household Life-Cycle segments cluster in the middle between these two, around the national average of 4%. Mid-Life Families (4.1%) and Young Singles (4.1%) are slightly higher, Older Households (4%) are right on the national average and Mid-Life Households (3.9%) are slightly below it.

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ROY MORGAN LIMITED