SAUL ESLAKE

Economist

SAUL ESLAKE

‘Welcome to my website …
I’m an independent economist, speaker, company director
and Vice-Chancellor’s Fellow at the University of Tasmania’

Good news and not-so-good news from the latest inflation data


The Australian Economy | 29th November 2023

There’s good news and not-so-good news in the monthly CPI Indicator for October released by the Australian Bureau of Statistics this (Wednesday) morning.

The good news is that consumer prices (or at least, the prices of the roughly two-thirds of the items in the more comprehensive quarterly CPI that are included in this monthly measure) fell by 0.3% in October, after rising by 0.6% in each of August and September. That brought the annual ‘headline’ inflation rate back down to 4.9%, where it had been in July, from 5.6% in September (and compared with the peak of 8.4% in December last year).

The decline in October was aided by a 2.9% fall in petrol price, a 0.4% fall in rents, the latter reflecting the increase in Commonwealth Rent Assistance to low-income rents which took effect in late September (without which rents would have risen 0.7%), and a 12% fall in overseas holiday costs.

The not-so-good news is that the Reserve Bank of Australia‘s preferred measure of the ‘underlying’ inflation rate – the ‘trimmed mean’ (which excludes the ‘outlyers’ at either end of the spectrum of individual price changes) rose by 5.3% over the year to October, down only 0.1 pc point from September, and from the peak of 7.2% last December.

Source: ABS

Underscoring RBA Governor Michele Bullock’s observation last week that Australia’s inflation was now largely ‘home-grown’, prices of ‘non-tradeable’ items rose by 0.3% in October and by 6.0% from a year earlier: whereas prices of ‘tradeable items’ fell 1.6% in October and rose by only 2.5% over the year to October.

Australia’s ‘headline’ inflation rate is higher than that over the same period in the US (3.2%), Canada (3.1%), the UK (4.6%), and the Euro area (2.9%); while our ‘underlying’ rate of 5.3% is higher than in the US (4.0%), Canada (3.4%), the euro area (4.5%) and, over the year to the September quarter, New Zealand (5.2%), though it was below the UK (5.7%).

Note: data for New Zealand are for the year ended September quarter.
Sources: ABS, US BLS, Statistics Canada, UK ONS, Eurostat, Statistics NZ.

Despite that, Australia’s cash rate of 4.35% is lower than in all of these other economies.

Today’s data is good enough to allow the RBA to leave the cash rate unchanged at next Tuesday’s final Board meeting for the year.

But unless there’s more progress in reducing inflation in the next two months, the possibility of another rate hike at the RBA’s first Board meeting in #2024, on 6th February, can’t be ruled out.

SPEAKING ENGAGEMENT

Speaking Engagement | Boardroom Advisory | Commissioned Report | Expert Witness



Saul Eslake online presentation


“You are the best economic thinker in the country hands down”

Sheryle Bagwell, recently retired Senior Business Correspondent (and sometime Executive Producer),
ABC Radio National Breakfast


“Just want to congratulate you Saul on the unbelievably good set of slides you just presented, possibly the best I have ever seen. You have set the bar very high.”

Dr Joe Flood, Adjunct Fellow, RMIT University, Pandemicia


“Thank you very much for your excellent presentation for the Economic Society today. It is always a great pleasure to hear your eloquent, up-to-date and comprehensive talks.”

Andrew Trembath, economist, Victorian and Australian Government agencies


Request Speaking Engagement

WHAT'S NEW

Most Recent Articles, Talks and Presentations


The Tasmanian Economy
Tasmania
29th February 2024


The worst public policy decision of the 21st Century
Economic Policies, Recent Media Interview
20th February 2024


Is ‘price gouging’ a major contributor to inflation?
Recent Media Interview
19th February 2024


The massive $50bn GST revenue distribution blow out (with Andy Park)
Economic Policies, Recent Media Interview
14th February 2024


The massive $50bn GST revenue distribution blow out (with Gary Adshead)
Economic Policies, Recent Media Interview
14th February 2024


Tasmania’s senior secondary education reform
Recent Media Interview, Tasmania
13th February 2024


Distribution of GST Revenue: the Worst Public Policy Decision of the 21st Century to date.
Australian Society and Politics, Economic Policies, The Australian Economy
4th February 2024


Insights on Asian Elections 2024 mentioned in The Economist
Asian Economies
30th January 2024


Alternatives to interest rates
Economic Policies, Recent Media Interview, The Australian Economy
29th January 2024


Reflections on ‘Australia Day’
Australian Society and Politics
26th January 2024


‘Stage 3’ tax cuts
Economic Policies, Recent Media Interview, The Australian Economy
25th January 2024


The proposed changes to the “stage 3 tax cuts”
Economic Policies, Recent Media Interview, The Australian Economy
24th January 2024


Don’t count your chickens when it comes to an RBA rate cut
Recent Media Interview, The Australian Economy
23rd January 2024


Have we passed ‘peak China’?
Asian Economies
23rd January 2024


Cost of Living and Housing Pressure
Recent Media Interview, The Australian Economy
22nd January 2024


VIDEO

Recent Presentations


See more


TESTIMONIALS

What Others Say


“You are one of the best at what you do in the world”
Gail Fosler, Chief Economist, The Conference Board, New York, December 2002

“I have never known an economist to have such a knowledge of world economic facts and to be able to bring to bear so much information in answering a question without notice”
Charles Goode, Chairman, ANZ Bank, July 2009

“Saul Eslake is … a highly regarded independent economist with the highest degree of integrity"
John Durie, Columnist, The Australian, July 2009

“… one of the few people in this world who can have so many oranges up in the air at the same time but still manage to catch them"
Andrew Clark, journalist, Australian Financial Review, November 2008

Read more

LINKS

Useful Links