Australia | Apr 09 2009
By Rudi Filapek-Vandyck
According to the latest survey by Westpac and the Melbourne Institute, consumers’ unemployment expectations saw their second consecutive fall in April, halting their rapid trend deterioration. The unemployment expectations index fell 3.6% in April to 175.27 after a 0.7% fall previously. This marks the first consecutive falls since April and May 2007, the economists point out.
These consecutive falls have been sufficient to halt the rapid uptrend in the series, with trend growth now minus 0.1%mth and +44.6%yr (vs +0.9%mth and +49.0%yr previously). Their trend deviation from their full history average also edged lower for the first time since October 2007, to 43.5% from 44.9% previously.
Nevertheless, say the economists, it still remains much higher than the peaks of the 1990/91 recession (31.5%) and 1982/83 recession (35.6%), and remains consistent with a rapid deterioration in jobs growth through 2009.
Consumers’ inflation expectations edged higher in April, with the median expectation rising to 2.4% from 2.2%. Nevertheless, their downtrend continued, falling to 2.11% from 2.22% previously. This, say the economists, is the lowest read since January 1998.
The median expectation of managers and professionals fell to 1.8% from 2.2% previously, taking their trend to a new record low (data commenced 1995) of 1.70%. The trend net balance expecting higher prices overall fell to a new record low of 42.3% from 42.7%, and the proportion of respondents expecting inflation within the 2% to 3% target band rose to 10.7% from 9.9%, the highest since April 2008 and therefore well above its twelve month average of 8.7%.