In potentially bad news for the Q4 inflation print, which is due in January, the TDS/Melbourne Institute monthly inflation gauge has today recorded accelerating price pressures, which the monthly number rising from +0.1% in September, to +0.3% in October and now +0.4% in November. According to Reuters:
"A private gauge of Australian consumer prices showed a pick up in overall price pressures in November...
The TD Securities-Melbourne Institute measure of consumer price inflation rose 0.4 per cent in November, compared to October when it rose 0.3 per cent. That was the largest monthly increase since May.
The index was 3.9 per cent higher than in November last year, compared to an annual pace of 3.8 per cent in October.
That was well above the Reserve Bank of Australia's (RBA) target range of 2 to 3 per cent, though the TD-MI gauge has tended to grow faster than the official measure of consumer prices which stood at 2.8 per cent in the third quarter.
"As the RBA took a pre-emptive stance against future inflationary pressures by shifting to a restrictive monetary policy stance last month, we expect the RBA to remain on the sidelines for the next few months," said Annette Beacher, head of Asia Pacific research at TD Securities...
"However, with inflationary pressures already building, the next move remains up for interest rates in Australia," Ms Beacher added.
Contributing most to the overall rise in the inflation gauge in November were increases in prices for fruit and vegetables and communication. These were partly offset by falls in prices for audio, visual and computing, holiday travel and accommodation, and meat and seafood.
The price of automotive fuel increased marginally, while rents rose by 0.6 per cent, the biggest increase since May.
The trimmed mean measure of the gauge rose by 0.3 per cent in November, while the annual pace slowed slightly to 3.0 per cent.
Ms Beacher said the gauge suggested the official measure of consumer prices (CPI) would rise by 0.9 per cent this quarter, to be 3.2 per cent higher for the year.
It also suggested the official measure of underlying inflation would rise by 0.8 per cent in the quarter, to be up 2.6 per cent for the year."
