Monthly CPI indicator
Date: Wednesday, 29 May at 11.30am AEST
In late April, important Australian inflation figures were released, showing a positive surprise. The Q1 2024 headline inflation increased by 3.6% YoY, which was slightly lower than the previous quarter’s 4.1%, but higher than the market’s expectation of 3.4%. The core inflation measure preferred by the RBA, Trimmed Mean, rose by 4% YoY, surpassing the market’s expectation of 3.8%.
Furthermore, the Monthly CPI indicator for March showed a 3.5% YoY increase, exceeding the market’s expectation of a 3.2% YoY rise. The three-month rolling average annualized growth rate in the seasonally adjusted core measure rose to 3.6% YoY from 2.8%.
The RBA’s May Board meeting minutes acknowledged the unexpected strength in inflation data, noting that inflation had eased but at a slower pace than expected. The Board discussed the possibility of raising rates but decided to keep them unchanged due to credible staff forecasts indicating a path back to the inflation target with balanced risks.
Since April only covers the first month of the new quarter, the Monthly CPI indicator for April will reflect updates on about 60% of the basket, mostly skewed towards goods rather than services like dining out, medical services, and transportation. The initial expectation is for the Monthly Indicator in April to ease to 3.3% YoY from 3.5%.
