The Consumer Price Index rose by 0.2% in the June quarter, below market expectations for a lift of 0.4%. The annual rate of inflation fell from 2.1% to 1.9% - below the RBA’s target band of 2-3%.
The Consumer Price Index – the main measure of inflation in Australia – rose by 0.2 per cent in the June quarter, below expectations for a lift of 0.4 per cent. In seasonally adjusted terms the CPI rose by 0.4 per cent. The annual rate of inflation fell from 2.1 per cent to 1.9 per cent.
Underlying measures: The Reserve Bank monitors three measures to derive the underlying inflation rate. The trimmed mean rose by 0.5 per cent in the June quarter (1.8 per cent annual); the weighted median rose by 0.5 per cent (1.8 per cent annual) and the CPI less volatile items rose by 0.4 per cent (1.5 per cent annual). Overall, underlying inflation rose by 0.5 per cent in the quarter and by 1.7 per cent over the year (The Reserve Bank would call this 1¾ per cent).
Main changes: Medical & hospital services rose by 4.1 per cent in the June quarter with new dwelling purchase up 0.9 per cent, tobacco up 1.0 per cent and beer up 1.0 per cent. Petrol prices fell by 2.5 per cent with fruit down 4.4 per cent and domestic holiday travel & accommodation down by 3.2 per cent.
Prices of a raft of items are at the lowest levels for around 30 years: Women’s clothing is the cheapest on record (28 years); car prices are just 0.3 per cent above the lowest levels in 29 years; garments (clothing) are the cheapest in 27 years; telecom equipment is the cheapest in 17 years; small household electrical items (lowest in 31 years); audio, visual & computing equipment is the cheapest on record (37 years).
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Craig James, CommSec Chief Economist
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