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MI Inflation Gauge Points To Pickup In November CPI

AUSTRALIA DATA

The Melbourne Institute’s measure of inflation rose a robust 1% m/m in November after 0.4% last month. This brought the annual rate to 5.9% from 5.2%, its highest since the series began in 2003.

  • The MI inflation measure has been tracking below the ABS’ monthly CPI data since the end of 2021 but the two series have a 96% correlation. This suggests that the November rise in MI inflation may signal a pickup in the headline CPI after it moderated in October.
  • A possible pickup in inflation in November is not surprising given that 38% of the basket was assumed to be flat in the October monthly CPI reading. RBA Deputy Governor Bullock also noted that it is going to take time to “figure out what is the noise” in the new monthly CPI series.
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The Melbourne Institute’s measure of inflation rose a robust 1% m/m in November after 0.4% last month. This brought the annual rate to 5.9% from 5.2%, its highest since the series began in 2003.

  • The MI inflation measure has been tracking below the ABS’ monthly CPI data since the end of 2021 but the two series have a 96% correlation. This suggests that the November rise in MI inflation may signal a pickup in the headline CPI after it moderated in October.
  • A possible pickup in inflation in November is not surprising given that 38% of the basket was assumed to be flat in the October monthly CPI reading. RBA Deputy Governor Bullock also noted that it is going to take time to “figure out what is the noise” in the new monthly CPI series.