Tag: Inflation

Are Pay Rises Chasing Inflation Higher?

In the UK, Annual growth in regular pay (excluding bonuses) is the highest we have seen since comparable records began in 2001. The Office for National statistics said In May to July 2023, annual growth in regular pay (excluding bonuses) was 7.8%, the same as the previous three-month period and the highest regular annual growth rate since comparable records began in 2001.

Annual growth in employees’ average total pay (including bonuses) was 8.5% in May to July 2023; this total growth rate is affected by the NHS and civil service one-off payments made in June and July 2023. But we can see workers are chasing real wages growth, as inflation eases, just a little with annual growth in real terms (adjusted for inflation using Consumer Prices Index including owner occupiers’ housing costs (CPIH)) for total pay up for the year by 1.2% and for regular pay a year on year rise of 0.6%.

In Australia, The Fair Work Commission released their latest data on Monday which revealed that average pay rises in new collective agreements in Australia have soared to a high of 4.7 per cent, closing in on inflation and putting pressure on wage forecasts. The increase is the highest average recorded since the commission’s data series began in mid-2022, surpassing previous highs of 4.4 per cent and is based on 174 deals lodged from August 12 to August 25, extended to 63,553 employees.

But with inflation at 6% on the quarter to June 2023, and the monthly series at 4.9%, on average workers are still going backwards in terms of real take home pay after inflation.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Are Pay Rises Chasing Inflation Higher?
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Are Pay Rises Chasing Inflation Higher?

In the UK, Annual growth in regular pay (excluding bonuses) is the highest we have seen since comparable records began in 2001. The Office for National statistics said In May to July 2023, annual growth in regular pay (excluding bonuses) was 7.8%, the same as the previous three-month period and the highest regular annual growth rate since comparable records began in 2001.

Annual growth in employees’ average total pay (including bonuses) was 8.5% in May to July 2023; this total growth rate is affected by the NHS and civil service one-off payments made in June and July 2023. But we can see workers are chasing real wages growth, as inflation eases, just a little with annual growth in real terms (adjusted for inflation using Consumer Prices Index including owner occupiers’ housing costs (CPIH)) for total pay up for the year by 1.2% and for regular pay a year on year rise of 0.6%.

In Australia, The Fair Work Commission released their latest data on Monday which revealed that average pay rises in new collective agreements in Australia have soared to a high of 4.7 per cent, closing in on inflation and putting pressure on wage forecasts. The increase is the highest average recorded since the commission’s data series began in mid-2022, surpassing previous highs of 4.4 per cent and is based on 174 deals lodged from August 12 to August 25, extended to 63,553 employees.

But with inflation at 6% on the quarter to June 2023, and the monthly series at 4.9%, on average workers are still going backwards in terms of real take home pay after inflation.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

The UK’s Pesky High Inflation!

The latest inflation figures from the UK showed that whilst headline inflation dropped a bit thanks to the base effects relating to energy a year ago dropping out, core inflation and services inflation were higher than forecast (again). Markets reacted pushing the cash rate expectations higher. Once again it appears the Bank of England are behind the curve.

New Zealand meantime lifted their cash rate to 5.5%, in a market leading attempt to get inflation under control!

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

The CPI Rockets To 7.8% – But Is This The Peak?

Stronger than expected data from the ABS today increases the likelihood of a cash rate hike from the RBA next month. The moving parts were all over the shop, warped by the addition and removal of various Government support programmes and holiday travel and spend.

No discretionary remains very high, and more costs will flow from higher wages. This may not be over as soon as many expect.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

UK Inflation Surprises On The Up Side…

The UK inflation data come in hot today, signalling broad-based inflation, including across services. Gas, electricity costs and food costs were among the main drivers, offset small falls in petrol and used cars.

This suggests the Bank of England will need to hike rates some more – though that may depend on the Chancellors Budget tomorrow.

Go to the Walk The World Universe at https://walktheworld.com.au/

Food Inflation Still Haunts The Halls… [Podcast]

The latest data from New Zealand, the UK and Canada highlights how embedded higher food prices are, something which also came through in recent ABS figures.

Even if petrol prices slide a little (and OPEC+ is trying to reverse that), many households will be wilting under the pressure from everyday costs of living.

And it’s worth noting there are various adjustments to inflation metrics which seem to drive them lower – I wonder why?

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Food Inflation Still Haunts The Halls... [Podcast]
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Food Inflation Still Haunts The Halls…

The latest data from New Zealand, the UK and Canada highlights how embedded higher food prices are, something which also came through in recent ABS figures.

Even if petrol prices slide a little (and OPEC+ is trying to reverse that), many households will be wilting under the pressure from everyday costs of living.

And it’s worth noting there are various adjustments to inflation metrics which seem to drive them lower – I wonder why?

Go to the Walk The World Universe at https://walktheworld.com.au/

The Inflation Monster Runs Free…. [Podcast]

Stocks wobbled but ultimately ended lower on Wednesday, as the fastest pace of inflation in decades stoked bets that the Federal Reserve will be forced to deliver a much larger than expected 1% rate hike later this year.
The S&P 500 closed down 0.5%, the Dow Jones Industrial Average fell 0.7%, or 208 points, the Nasdaq fell 0.1%.

U.S. inflation rose 9.1% in June to hit a fresh four-decade high, topping economists’ forecast for a 9% rise, driven by an 11.2% leap in gas prices and a 1.0% increase in food prices.

This report will make for very uncomfortable reading at the Fed,” it added.
US inflation roared again to a fresh four-decade high last month, likely strengthening the Federal Reserve’s resolve to aggressively raise interest rates that risks upending the economic expansion.

The widely followed inflation gauge increased 1.3% from a month earlier, the most since 2005, reflecting higher gasoline, shelter and food costs. The so-called core CPI, which strips out the more volatile food and energy components, advanced 0.7% from the prior month and 5.9% from a year ago, above forecasts.

The red-hot inflation figures reaffirm that price pressures are rampant and widespread throughout the economy and taking a bigger toll on real wages, which are down the most ever in data back to 2007. The inflation data will keep Fed officials on an aggressive policy course to rein in demand, and adds pressure to President Joe Biden and congressional Democrats whose support has slumped ahead of midterm elections.

“Rather than cooling down, inflation is heating up,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note. “While a pullback in gasoline costs in July and reported retail discounting will help tamp down the flames, the broad pressure in the core rate, led by plenty of inertia in rents, suggests inflation may not peak for a while, and might remain stubbornly high for longer than anticipated.”

Go to the Walk The World Universe at https://walktheworld.com.au/

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
The Inflation Monster Runs Free.... [Podcast]
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Inflation Set To “Power” Higher!

More bad news on the inflation front as power prices are set to rise, and the ABS confirms many firms are seeking to lift prices where they can.

We are already seeing second order effects, and these will continue ahead.

The battle to tame inflation has hardly started yet.

Go to the Walk The World Universe at https://walktheworld.com.au/