PPI slumps as well
The Producer Price Index (PPI) figures were released late in the week, and there was a slump from 2 per cent to just 1.6 per cent, mirroring the weak CPI figures from earlier in the week.
Here, then, is a quick recap on some of the most recent data:
-inflation yet again came in very low, with the weighted median measure at just 0.3 per cent, and the trimmed mean CPI rounding up to 0.4 per cent;
-credit growth decelerated to 2.7 per cent, the slowest annual result since Q2 2011, with housing credit growth tracking at the lowest level on record (and investor credit growth negative over recent months);
-building approvals continued to trend down - new houses look to have formed a base in real time, but confidence in new apartment towers has been shredded;
-commodity prices fell by an estimated 2.4 per cent in October (in SDR terms, on a monthly average basis), following on from a revised decline of 2.9 per cent in September; and
-the Aussie dollar jumped from 67 cents to 69.2 cents as the US Federal Reserve again cut interest rates.
With the coming week's retail figures likely to confirm a sector in an ongoing recession, it's not exactly a great rap sheet, with the economy growing well below its potential.
Yet financial markets are pricing only long-shot odds of a rate cut for Melbourne Cup day, and perhaps no further easing at all.
Cred on the line
What's curious is that recent Board Minutes have stressed that the RBA is targeting full employment and inflation returning to target, and there's been a strong easing bias in the language used.
Yet markets seemingly simply don't believe it.
Why is low inflation or continually missing the target even a problem, you might ask?
Part of the reason is that low inflation expectations can become embedded if credibility is lost.
Housing prices are indeed rising, but the Governor has stated that he doesn't see an issue with that.
The economist view around the traps seems to be that only a firm hand from the Treasury can see the RBA committing to hitting the target.
Spooking the horses
In a bored moment, some time was spent scouring the news and views for other reasons that rates might be kept on hold.
'Because they will' was apparently the most popular reason given (which may be accurate, if a touch light on detail).
The only other credible explanation I found was via the incomparable Bill Evans of Westpac, who suggested that back-to-back cuts might spook consumers, and therefore we're back to waiting Micawber-style for something, hopefully, to turn up.
In reality, although the latest jobs figures weren't bad, the unemployment rate has been trending higher as construction now slows, and most polled economists believe that rates will be cut by Q1 2020 anyway.
Here's hoping they've backed the right 'orse!
