Price expectations much higher for Australia’s unemployed
Australians as a whole expect prices to increase by 3.9% annually over the next two years, according to Roy Morgan surveys conducted in November. This is slightly below (0.2%) public view on price movements in October, and down to a greater degree (0.4%) on expectations a year earlier.
These numbers are relatively small (although the changes are significant), but comparing price expectations by employment status reveals a stark divide between Australians in employment and those who aren’t. Australians in full-time employment expect prices to increase by only 3.3% annually over the next two years, while people who are unemployed expect price increases approaching twice that – 5.8% per year.
Between these two extremes are Australians employed part-time, who expect prices to increase by 4% annually over the next two years. Within that grouping are people who are employed part-time but would like to work more hours – the under-employed. These Australians expect price increases of 5% per year over the next two years – far closer to unemployed people than other part-time employees.
”The Roy Morgan Inflation Expectations index measures what Australians believe the future trajectory of prices will be over the next two years. Every Australian brings a unique perspective to the anticipated movement in prices, including which prices are important to them in particular – whether that be food and drink prices, the price at the pump, prices for clothing and footwear, the cost of going to the cricket, or prices for financial products, education, housing or public transport,” says Roy Morgan CEO Michele Levine.
“In November, price expectations were at 3.9%, significantly below the decade average of 4.9%. Unsurprisingly, employed Australians, who are currently better able to meet household expenses, have lower price expectations than those looking for work. Full-time employees expect prices to rise by only 3.3% annually over the next two years which is significantly lower than for either unemployed Australians (5.8%) or under-employed Australians (5.0%),” said Ms. Levine.
Inflation Expectations by Employment Status: November 2019
Source: Roy Morgan Single Source: November 2019, n=4,002. Base: Australians 14+.
Price expectations are significantly higher for supporters of Independents & minor parties
There are splits, too, along political lines. Analysing Inflation Expectations by political affiliation shows supporters of Independents and other parties (5.2%) have significantly higher price expectations than supporters of any of the major parties, including ALP supporters (3.9%), L-NP supporters (3.6%) or Greens supporters (3.6%).
Inflation Expectations Index long-term trend – Expected Annual Inflation in next 2 years
Source: Roy Morgan Single Source: Interviews an average of 4,000 Australians per month aged 14+ (Apr. 2010 – Nov. 2019).
November Inflation Expectations are based on personal interviews with a nationally representative sample of 4,002 Australians aged 14+.
To learn more about the trends for Inflation Expectations as well as Consumer Confidence for different segments and demographics throughout the Australian community purchase the Roy Morgan Consumer Confidence Monthly Report.
| Monthly Roy Morgan Inflation Expectations Index (2010 – 2019) | |||||||||||||
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YearlyAverage |
| 2010 | n/a | n/a | n/a | 5.9 | 5.8 | 5.5 | 5.6 | 5.4 | 5.5 | 5.8 | 5.6 | 5.8 | 5.7 |
| 2011 | 6.6 | 6.4 | 6.4 | 6.2 | 6.1 | 6.2 | 6.1 | 5.8 | 5.7 | 5.8 | 5.5 | 5.5 | 6.0 |
| 2012 | 5.4 | 5.5 | 5.9 | 5.9 | 6.0 | 6.2 | 5.9 | 5.9 | 5.8 | 5.7 | 5.6 | 5.4 | 5.8 |
| 2013 | 5.2 | 5.1 | 5.3 | 4.9 | 5.2 | 4.9 | 5.3 | 5.0 | 4.8 | 4.9 | 4.8 | 5.0 | 5.0 |
| 2014 | 5.1 | 5.2 | 5.2 | 5.1 | 5.1 | 5.3 | 5.0 | 4.8 | 5.0 | 4.8 | 4.9 | 4.4 | 5.0 |
| 2015 | 4.4 | 4.3 | 4.5 | 4.5 | 4.2 | 4.4 | 4.4 | 4.5 | 4.5 | 4.2 | 4.4 | 4.5 | 4.5 |
| 2016 | 4.3 | 4.2 | 4.2 | 4.2 | 4.0 | 4.0 | 4.1 | 3.9 | 4.1 | 4.1 | 3.9 | 4.2 | 4.1 |
| 2017 | 4.5 | 4.4 | 4.4 | 4.4 | 4.3 | 4.2 | 4.3 | 4.5 | 4.4 | 4.5 | 4.5 | 4.5 | 4.4 |
| 2018 | 4.5 | 4.4 | 4.3 | 4.5 | 4.3 | 4.5 | 4.3 | 4.3 | 4.3 | 4.5 | 4.3 | 4.2 | 4.4 |
| 2019 | 4.2 | 4.0 | 4.0 | 3.7 | 4.1 | 3.8 | 4.1 | 3.9 | 4.0 | 4.1 | 3.9 | 4.0 | |
| Monthly Average | 4.9 | 4.8 | 4.9 | 4.9 | 4.9 | 4.9 | 4.9 | 4.8 | 4.8 | 4.8 | 4.7 | 4.8 | 4.9 |
| Overall Roy Morgan Inflation Expectations Average: 4.9 |
The questions used to calculate the Monthly Roy Morgan Inflation Expectations Index.
1) Prices.
“During the next 2 years, do you think that prices in general will go up, or go down, or stay where they are now?”
2a) If stay where they are now.
“Do you mean that prices will go up at the same rate as now or that prices in general will not go up during the next 2 years?
2b) If go up or go down.
“By about what per cent per year do you expect prices to (go up/ go down) on average during the next 2 years?”
3) If respondent says more than 5%.
“Would that be (x%) per year, or is that the total for prices over the next 2 years?”
The Roy Morgan Inflation Expectations Index is a forward looking indicator unlike the Consumer Price Index (CPI) and is based on continuous (weekly) measurement, and monthly reporting. The Roy Morgan Inflation Expectations Index is current and relevant.
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Margin of Error
The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.
| Sample Size | Percentage Estimate |
| 40% – 60% | 25% or 75% | 10% or 90% | 5% or 95% | |
| 1,000 | ±3.0 | ±2.7 | ±1.9 | ±1.3 |
| 5,000 | ±1.4 | ±1.2 | ±0.8 | ±0.6 |
| 7,500 | ±1.1 | ±1.0 | ±0.7 | ±0.5 |
| 10,000 | ±1.0 | ±0.9 | ±0.6 | ±0.4 |
| 20,000 | ±0.7 | ±0.6 | ±0.4 | ±0.3 |
| 50,000 | ±0.4 | ±0.4 | ±0.3 | ±0.2 |
