The TD Securities/Melbourne Institute (MI) Inflation Gauge for May is out at .3% and year on year is 2.9% (chart from COMMSEC).
Underlying inflation came in at 0.2% down from +0.5% in April and 2.9% year on year, down from 3.1% in April.
Fruit and vegetables, furniture and tobacco rose and holiday travel and accommodation, health, footwear and petrol fell. Annette Beacher didn’t get the Budget or iron ore memo:
“The clear signal from our gauge is that inflation remains sticky and the `soft’ prior March quarter consumer price index report could prove to be a one-off. We believe the recent substantial upgrade to 2014/15 services investment plans should be well received, and combined with the leap in residential construction in the early months of 2014 proves that non-mining activity can offset the decline in mining investment. The market remains too complacent by not pricing any rate rises over the next twelve months.”
