Data Visualization and Communication - Assignment 3

A Data-Driven Story of CPI, PPI, and Economic Resilience

s3700604 - Nguyen Tuan Vu

June 11, 2025

Objectives & Audience

Objectives
  1. Assess the overall impact of CPI and PPI on economic indicators
  2. Examine sectoral wage growth (private vs public)
  3. Evaluate wage growth coverage against inflation measures
  4. Identify structural relationships between prices and wages
Audience
  • Policymakers: Regional wage impact analysis
  • Economists: Macroeconomic risk assessment
  • Investors: Market risk evaluation
  • Business Leaders: Sectoral strategy formulation

Data Overview

Key Metrics Tracked (2020–2025):
✔ CPI: Consumer Price Index
✔ PPI: Producer Price Index
✔ Wage Growth in Private/Public: Sectoral Performance

First 3 Rows of Dataset
Quarter CPI_Quarter_Change CPI_Annual_Change PPI_Indexes PPI_Quarter_Change PPI_Annual_Change Private Public
2020-03-01 0.3 2.2 112.6 0.2 1.3 2.1 2.3
2020-06-01 -1.9 -0.3 111.2 -1.2 -0.4 1.8 2.1
2020-09-01 1.6 0.7 111.7 0.4 -0.4 1.2 1.8

Why This Matters: The data is collected and compiled from inflation swings, producer price indexes, and wage growth during the period of economic upheaval from pandemic shocks to aggressive inflation surges.

Inflation Comparison: Consumers vs Producers

📌 Key Insights:
1. PPI consistently leads CPI by 2-3 quarters (critical for inflation forecasting)
2. 2022 inflation spike originated in supply chains (PPI peaked at 7.8% before CPI’s 7.3%)
3. 2024 convergence suggests stabilized supply-demand balance

Quarterly Price Volatility

🔍 Key Insights:
1. Q2 2020: Sharp Decline
- Severe bottlenecks in global supply chains from COVID-19 restrictions
- CPI: -1.9%, PPI: -1.2% (largest quarterly drops)
2. 2022: Global inflation hits record high
- PPI peaked first (Q3 2022: +1.9%)
- CPI followed with 1-2 quarter lag
3. 2024: Stabilization
- Fluctuations within ±1% range
- PPI remains more volatile than CPI

Wage Growth vs Inflation: Sectoral Comparison

📌 Key Insights:
• 2022 Q3: Worst real wage losses (Private: -3.9%, Public: -4.9%)
• 2023 Onward: Private sector shows stronger recovery
• Public sector only matched inflation in late 2023

Real Wage Gap: Public vs Private Sectors

📌 Key Insights:
1. Early Period (2020-2021): Public sector wages kept up better with inflation
2. Inflation Crisis (2022): Private sector gained significant advantage (peaking at +1.4%)
3. Structural Trend: Private sector maintains ~0.7% average advantage post-2021

PPI and Real Wage Dynamics

📌 Key Insights:
1. COVID Period: PPI volatility (-0.4% to +2.9%) preceded wage declines by ~2 quarters
2. PPI-Wage Relationship: Private sector (green) follows PPI trends more closely than public (red)
3. 2022 Inflation: PPI peaked before wages adjusted, especially in public sector

Key Conclusions: Inflation & Wage Dynamics (2020-2025)

📊 Economic Insights Summary

✓ CPI-PPI Relationship: PPI led CPI by ~1 quarter, signaling cost-push inflation (2021-2023)

✓ Private Sector Resilience: Achieved +3.2% cumulative real wage growth vs +1.8% in public sector

✓ COVID Impact: Q2 2020 saw worst PPI contraction (-1.2%) and real wage losses (-3.9% private, -4.9% public)

✓ Inflation Peak: 2022 Q4 recorded highest CPI (7.8%) and PPI (5.8%) annual growth

✓ Sectoral Divergence: Private sector wages adapted faster to PPI shocks (0.82 correlation vs 0.76 public)

✓ Recent Stabilization: 2024 showed convergence near 3-4% nominal wage growth across sectors

REFERENCES

  1. Australian Bureau of Statistics. (2025).
    Wage price index, Australia, March 2025 – Annual wage growth by sector, seasonally adjusted [Data set].
    https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/mar-2025#sector-wage-growth
    (Accessed: 28 May 2025)

  2. Australian Bureau of Statistics. (2025).
    Producer price indexes, Australia, March 2025 – Final demand, quarterly and annual percentage change and index [Data set].
    https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/producer-price-indexes-australia/mar-2025
    (Accessed: 28 May 2025)

  3. Australian Bureau of Statistics. (2025).
    Consumer price index, Australia, March quarter 2025 – All groups CPI, Australia, quarterly and annual movement (%) [Data set].
    https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/mar-quarter-2025
    (Accessed: 28 May 2025)