According to the ABS, Australia’s Consumer Price Index (CPI) came in at 0.9% in the December quarter – further rebounding from the largest quarterly fall in the 72 year history of the CPI in the June quarter:
However, over the year, CPI rose by just 0.9%:
There are 1090 words left in this subscriber-only article.
Start your free 14-day trial today!
Looking at the major components, you can see that quarterly lift in CPI was driven by Alcohol & Tobacco and Furnishings & Household Equipment:
The ABS includes an ‘analytical series’, which provides alternative measures of underlying inflation in the economy. These measures – namely the trimmed mean and weighted median – aim not to measure the size of inflation (which is captured by the headline figure), but the breadth of price inflation across the basket of consumer goods and services.
The purpose of these measures is to exclude unusually large price movements (in both directions) of just a few of the subgroups, which may have quite an impact on the headline CPI. By excluding these outliers, you can get a feel for how widespread across the consumer basket inflation really is (see here for further details).
According to the ABS, the trimmed mean and weighted median measures came in below the headline result at 0.4% and 0.5% respectively over the December quarter. Over the year, the trimmed mean and weighted median rose by 1.2% and 1.4%.
The below charts, which average-out these measures, shows underlying inflation on a quarterly and annual basis:
In short, CPI growth remains soft with the economy still experiencing overcapacity.