The ABS has just released CPI data for the March quarter, with headline inflation surging by 2.1% over the quarter and by 5.1% year-on-year:
Soaring petrol prices (Transport) drove the rise:
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Trimmed mean annual inflation, which excludes large price rises and falls, increased to 3.7% – the highest since March 2009:
Both headline inflation (2.1% QoQ versus 1.7% expected) and trimmed inflation (1.4% QoQ versus 1.2% expected) beat analysts expectations.
According to the Head of Prices Statistics at the ABS, Michelle Marquardt:
“The CPI recorded its largest quarterly and annual rises since the introduction of the goods and services tax (GST).”
“The most significant contributors to the rise in the March quarter CPI were new dwellings (+5.7 per cent), automotive fuel (+11.0 per cent) and tertiary education (+6.3 per cent).”
“Underlying inflation measures reduce the impact of irregular or temporary price changes in the CPI. Quarterly trimmed mean inflation increased to 1.4 per cent, the strongest movement since the beginning of the series in 2002. Annual trimmed mean inflation increased to 3.7 per cent, up from 2.6 per cent in the December quarter. Ms Marquardt said: “Annual trimmed mean inflation was the highest since 2009. This reflected the broad-based nature of price rises, as the impacts of supply disruptions, rising shipping costs and other global and domestic inflationary factors flowed through the economy.”
The only thing stopping the RBA from raising rates is the Q1 wage growth data, which will be released next month.
I’ll be back later with my usual detailed report.