The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Monday, August 1, 2011

How widespread are Australian inflation pressures? (chart)

Working with the ABS, we have been able to quite accurately reconstruct the RBA's individual seasonally-adjusted 'trimmed mean' and 'weighted median' inflation measures. We wanted to look at a few questions. First, on a seasonally-adjusted basis, how broad-based are Australian inflation pressures? The chart below tells the story. Over 52% of the 90 CPI consumer product expenditure classes are growing at more than the RBA's 2.5% pa inflation target. The second question we wanted to address was, What happens if you remove the controversial "deposit and loan facilities" class (even though the cost of consumer financial services--viz., bank margins--have clearly been expanding). Based on our numbers, the trimmed mean CPI measure falls from 0.92% to 0.85%, or to a still-very-high 3.4% annualised rate.