Price pressures ease
The best real-time indicator of what's happening in the Aussie economy often comes from the business surveys.
NAB's Business Survey for October thankfully recorded a slight easing in cost and price pressures, with the quarterly equivalent pace for final prices falling back to 0.5 per cent.
If sustained, this would be consistent with inflation tracking towards the middle of the 2 to 3 per cent target band.
This may also provide a modicum of comfort to the RBA that last quarter's jump in inflation could've been driven by a few temporary or seasonal factors, such as property rates and charges, automotive fuel prices, and airfares.
The Labor government
may yet elect to extend its 'temporary' electricity rebates, which do help to reduce inflation, as previously noted (in part because various other cost increases in the economy are benchmarked against headline inflation figures; meanwhile subsidies can themselves reduce consumer inflation expectations).
Business confidence (-2 points) pulled back a little over the month, but business conditions (+2 points) picked up a little further.
This was welcome news for trading conditions, since the RBA's Andrew Hauser hinted in yesterday's speech in Sydney that the Australian economy could become boxed into the slow lane given ongoing weak productivity growth.
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