The Q1 quarterly inflation release from the Australian Bureau of Statistics (ABS) revealed that annual trimmed mean inflation declined to 2.9%, to be within the Reserve Bank of Australia’s (RBA) 2% to 3% inflation target.
On a six-month annualised basis, trimmed mean inflation fell to around 2.5%.
On Tuesday, the ABS released its monthly CPI indicator for April, which reported that annual headline inflation was 2.4% and the policy-important annual trimmed mean inflation was 2.8%, slightly higher than March’s reading of 2.7%:
The result was marginally higher than economists’ expectations.
The following chart from Alex Joiner at IFM Investors plots the monthly reading against the official quarterly CPI:
Source: Alex Joiner (IFM Investors)
Joiner has also plotted the result against the RBA’s forecast:
The monthly CPI data from Australia does not show all components of the CPI. The monthly reading includes updated prices for between 62% and 73% of the weight of the quarterly CPI basket.
Nevertheless, the monthly CPI indicator does provide a timelier indication of inflation using the same data collected for use in the quarterly CPI.
The result suggests that a July rate cut is no certainty and that the RBA will keep a watchful eye on inflation.
