Australian CPI overshoots expectations

By Leith van Onselen

The Australian Consumer Price Index (CPI) for the December quarter is out and came in at 0.4% for the quarter, above market expectations of 0.3%, but still weighed-down by the lower petrol price:

In the year to December, CPI was just 1.7%, 0.2% above last quarter’s annual reading of 1.5% and above the 1.6% expected by analysts.

Most importantly for interest rates, underlying inflation is running at the lower end of the RBA’s inflation target, coming it at 0.6% (trimmed mean) and 0.5% (weighted median) for the quarter and by 2.1% (trimmed mean) and 1.9% (weighted mean) over the year.

Hence, there are few inflationary pressures.

I will be back shortly with a detailed report.