NAB's Business Survey is just about the best real-time indicator of what's going on in Australia.
The December survey showed business conditions deteriorating somewhat from +20 to +12.
Source: National Australia Bank
But the most notable reading was the labour costs growth, with the percentage change at the quarterly rate dropping from 2.8 per cent to just 2 per cent.
The drop in labor costs since July has been both very harp and evidenced across all industries.
As such, NAB sees inflationary pressures as likely having already peaked in Q4.
Interest rates peaking
This makes sense, since it wasn't low interest rates which drove most of the spike in inflation, so much as it was unprecedented international border closures and epic supply chain disruptions (both chronic issues which are now righting themselves).
The Aussie dollar has also blazed from 62 cents to 70.3 US cents, which won't hurt from an imported inflation perspective, while the 3-year bond yield is trading at 2.99 per cent.
The Q4 inflation figures will be reported by the ABS tomorrow morning, and will show inflation peaking some way below the previous forecasts of 8 per cent (perhaps with a headline inflation rate for 2022 at around 7½ per cent).
The most balanced central bank watcher, James Glynn, gives his take in the Wall Street Journal here.
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CoreLogic notes that new property listings are again running below average so far his year.
Source: CoreLogic
Total listings are now some -32 per cent lower than their 5-year average, supporting prices in the lower price brackets (while the top quartile of the market is still losing ground).
