Aussie inflation gauge loses steam easing rates pressure

The Melbourne Institute’s headline and trimmed mean monthly inflation gauges for Australia declined in April, easing inflation concerns.

Headline inflation rose by only 0.09% in April to be 3.68% higher year-on-year (a two-year low):

Source: Alex Joiner (IFM Investors)

The core measure, trimmed mean, was only 0.15% in April to be up 3.18% year-on-year—the lowest result since June 2022:

Source: Alex Joiner (IFM Investors)

Excluding volatiles, the MI inflation gauge has bombed, falling 0.04% in three-month average terms:

Source: Alex Joiner (IFM Investors)

That said, Justin Fabo at Antipodean Macro has cautioned that the MI inflation gauge has not provided a reliable read on the ABS data in recent times:

Nevertheless, when viewed alongside last week’s collapse in retail sales, it suggests that talk of rate hikes was premature.