Inflation expectations [G3]

Updated by DBnomics on

July 1, 2020

Notes

• G3 INFLATION EXPECTATIONS
• ‘Consumer expectations’ are measured by the Melbourne Institute Survey of Consumer Inflationary Expectations trimmed mean expected inflation rate for the year ahead; the data are collected monthly and end-quarter observations are shown. Data prior to 2016 are available from the Melbourne Institute.
• ‘Business expectations’ are measured by the National Australia Bank Quarterly Business Survey respondents’ expectations for the increase in final product prices over the next three months; annualised averages are shown.
• ‘Union officials' expectations’ are the median inflation expectations measured in a survey by the Australian Council of Trade Unions (and previously by the Workplace Research Centre and Employment Research Australia). ‘Market economists’ expectations’ are the median inflation expectations measured in a survey by the RBA. The surveys are held once each quarter following the release of the Consumer Price Index and before the publication of the Statement on Monetary Policy. The surveys collect expectations of inflation in the years to June and December quarters over the next one to two years. The dates refer to the quarter in which the survey data are collected. The 1-year-ahead expectations are for inflation over the year to the subsequent December quarter for surveys held in the December and March quarters and for inflation over the year to the subsequent June quarter for surveys held in the June and September quarters. The 2-year-ahead expectations are for year-ended inflation as at the December quarter of the following year for March and June quarter surveys; and for year-ended inflation as at the June quarter of the year after the following year for September and December quarter surveys. Between June quarter 2002 and December quarter 2004, the 1-year-ahead ‘Market economists' expectations’ are for inflation over the subsequent 4 quarters (inclusive of the quarter in which the data were collected). Prior to June quarter 2002, the 1-year-ahead ‘Market economists’ expectations’ are for inflation over the year to the subsequent June quarter for surveys held in the June and September quarters. Data were not collected for 1-year-ahead inflation expectations in March and December quarters. Prior to June quarter 2005, data were not collected for Market economists’ 2-year-ahead inflation expectations in the March and June quarters.
• The ‘Break-even 10-year inflation rate’ is measured by the Reserve Bank using Commonwealth government securities; end-quarter observations are shown. For data since 1996, the RBA uses interpolation and projection of the yield curve to estimate both nominal and inflation-indexed bond yields with an exact 10-year maturity. Prior to 1996, these adjustments are not made and the nominal and inflation-indexed bond yields used to derive the series may not reflect ideal 10-year maturities.