The ABS this morning has released the Producer Price Indices for September. Producer Prices (PPI), unlike consumer prices in the CPI, reflect movements in the prices businesses pay for inputs into the goods and services we consume in the economy.
They are a good lead on where prices will go in the future and how much businesses will need to increase prices.
So the good news is that Producer prices at all stages of production, preliminary, intermediate and final demand showed inflation remains low.
The bad news, however, is that prices for final demand only rose by 0.2% while intermediate and preliminary prices fell 0.1% and 0.4% respectively, suggesting demand within the economy is not overly strong.
At least we know rates won’t be rising in Australia anytime soon.