US consumer confidence of the Conference Board and Richmond Fed manufacturing survey both gave somewhat of a similar message. Current activity shows ongoing signs of resilience but respondents are more cautious on the future. Headline consumer confidence eased to 103.1, but the August figure was upwardly revised from 106.1 to 108.7.
Current conditions improved further from 146.7 from 147.1 while the expectations measure tumbled from 83.3 to 73.7. US consumers especially saw deteriorating business conditions, employment perspectives and income perspective over a six month horizon.
Inflation expectations in 12 months were unchanged at 5.7%. The September Richmond manufacturing index improved from ‐7 to +5, with shipments, new orders, capacity utilization, wages and employment all showing higher readings in a monthly perspective. The prices paid indicator also again rose from 3.17% to 4.06%. Prices received eased marginally to 3.06%. However, the assessment for business six months for now was less optimistic with especially indices for shipments (12 from 22) and new orders (17 from 22) easing. Labour market forward looking indices remained solid. Expectations for price trends are expected to cool down.
Monthly CPI from the Australian Bureau of statistics reaccelerated to 5.2% Y/Y in August from 4.9% in July. The rises came after three consecutive declines and compare to a cycle top of 8.4% Y/Y in December last year. The indicator excluding volatile items (fruit and vegetables, auto fuel and holiday travel) still declined from 5.8% to 5.5%. Trimmed mean underlying inflation was unchanged at 5.6% Y/Y.
The most significant price rises were housing (+6.6%), transport (+7.4%), food and non‐alcoholic beverages (+4.4%) and insurance and financial services (+8.8%). Electricity prices rose 12.7% Y/Y, reflecting higher wholesale prices being passed on to customers. The rise even was tempered by the introduction of rebates from the Energy Bill relief Fund. Automotive full prices rose 13.9% Y/Y due to a 9.1%M/M rise in August. Both headline and core measures remain well above the 2‐3% RBA target, keeping the debate on further tightening alive. The impact of the data on markets was limited. The 2‐y Australian yield eased about 2.5 bps. Markets still see change of about 70% for a rate hike in Q1 next year. The Aussie dollar remains under pressure from a strong US dollar with AUD/USD trading near 0.6385.
