Business, consumer confidence slump on inflation and rate rises

Labour and input costs hit fresh records in the latest NAB Monthly Business Survey, while corporate sector confidence slumped below the long-run average despite strong business conditions and forward orders.

He added that the number of people who recalled hearing about inflation in the news had risen to the highest levels since just prior to the GFC.“The news recall for inflation rose to around 60, its highest since just prior to the GFC.” “This implies a broadening of inflation pressures, and we again expect every item in this underlying measure to rise in the quarter,” Ms Masters said.continue to expect the RBA to continue its sprint down a narrow path towards neutral, hiking by 50 basis points in August.”According to NAB, business labour costs rose by a survey record 3.6 per cent over the quarter to June, with the result coming ahead of the Fair Work Commission’s decision to increase the minimum and award wages by 5.

“Overall, the survey suggests firms are increasingly wary of how the economy will hold up over the months ahead, despite continuing to experience fairly strong conditions at present.”“Still, reasons for optimism remain – including elevated household savings and a strong labour market – which will weigh against concerns about the impact of inflation and interest rate rises on consumers.”

Will the consumers bully the RBA? Yet to be seen

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