Core Inflation

The December quarter CPI to be released on Wednesday is seen at 0.4% q/q and 2% y/y, according to Friday’s Reuters poll.  This is somewhat higher than the 0.1% q/q and 1.7% y/y implied by the TD-MI inflation gauge. 

The trimmed mean is seen at 0.6% q/q and a steady 3.2% y/y.  The weighted median is seen at 0.6% q/q and 3.5% y/y, down from 3.8% y/y in the previous quarter.  It is noteworthy that despite a near two percentage point increase in the unemployment rate, core inflation was not reduced to an annual rate consistent with the RBA’s 2-3% target range during the recent economic downturn.

posted on 25 January 2010 by skirchner in CPI, Economics, Financial Markets, Monetary Policy

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A Turning Point for Inflation?

The TD Securities – Melbourne Institute Monthly Inflation Gauge rose by 0.3% in December, following a 0.3% rise in November. In the twelve months to December, the Inflation Gauge rose by 2.6%.  This is a fairly rapid acceleration from the October low of 1.2% y/y, which may well have been a turning point for CPI inflation.  According to the Melbourne Institute, the gauge points to an increase in the December quarter CPI of 0.1%, yielding an annual inflation rate of 1.7%, a pick-up on the 1.3% annual rate seen in the September quarter.  The December quarter CPI is released on 27 January.

posted on 18 January 2010 by skirchner in CPI, Economics, Financial Markets, Monetary Policy

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