Inflation declines month on month: Justin Smirk

Inflation declines month on month: Justin Smirk
Inflation declines month on month: Justin Smirk

GUEST OBSERVER

The February Gauge printed a decline of 0.3 percent/mth taking the annual rate down slightly from 2.0 percent/yr to 1.9 percent/yr.

The three month change dipped to 0.8 percent from 1.2 percent in January.

As February is the mid-month of Q1 it provides the Gauge's first estimate of the Q1 CPI.

More recently, the end quarter reading has provided a better guide to the CPI than the mid-month.

As such, we will wait for the March reading to get a more comprehensive update.

However, since March 2016 neither measure has provided us with a reliable guide to the CPI.

As such we recommend the cautious application of the Gauge as a leading indicator of the CPI.

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Justin Smirk is ‎senior economist, Westpac Group and can be contacted here.

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Inflation Gauge Justin Smirk

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