Cost of living eases
The annual cost of living growth for employee households has fallen from 2.3 per cent in June 2018 to 1.9 per cent in December 2018.
The main contributor to the modest price increases has been the huge and ongoing growth in excise on tobacco.
So it's basically excellent news...as long as you aren't a smoker.
Fuel prices are now falling, and therefore real incomes are rising.
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A far more dovish speech from the RBA Governor Lowe today:
"Looking forward, there are scenarios where the next move in the cash rate is up and other scenarios where it is down.
Over the past year, the next-move-is-up scenarios were more likely than the next-move-is-down scenarios.
Today, the probabilities appear to be more evenly balanced..."
Which sounds much more like where things are at.
Financial markets are now pricing in a rate cut by the middle of next year.
