Inflation expectations remain high in May

The May 2022 Survey of Consumer Inflationary and Wage Expectations was released at 11am AEST, Thursday, 12 May 2022.

The expected inflation rate (30-per-cent trimmed mean measure) fell by 0.2 percentage points in May, albeit remaining at a high 5.0 per cent. Total pay was expected to grow by 0.8 per cent over the next 12 months.

Despite a small drop in inflation expectations, the results continue to show heightened inflation, with the trimmed mean inflation expectation in May being 1.5 percentage points above its value at this time last year. This is consistent with inflation of 5.1 per cent reported by the ABS for the March quarter. There continues to be a disparity between inflation and wage expectations, with wage expectations remaining relatively weak. The results suggest that consumers, thus far, do not expect higher inflation to filter through to wage growth.

The June 2022 Survey of Consumer Inflationary and Wage Expectations will be released at 11am AEST, Thursday, 16 June 2022.

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The Melbourne Institute Survey of Consumer Inflationary Expectations measures are designed to represent the average householder’s expected rate of consumer price changes over the coming 12 months. Further information can be found here.

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A/Prof Sam Tsiaplias

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