Australians Expect The Highest Inflation Rate Since October

Australians expect the highest level of inflation since October, after gasoline rose to $1.50 per liter, or $6.40 per gallon. The anticipated 3.5% inflation rate might not necessarily be a realized threat. Labor market weakness might check the growth of wage-led inflation in the coming month or two. Wages in the second quarter rose at the slowest pace in five years. Furthermore, the economy failed to inspire full-time job creation. But the public does have some reason to believe the price of living will jump ahead. At its latest meeting, the RBA revised its growth forecast for 2009 significantly upward. The bank actually believes that their economy will expand by 0.5% - quite a stark difference from the 1.0% contraction which was originally anticipated. It will be a tough call to predict. But in the mean time wages might continue to slow in gains, easing the pressure on overall inflation.