MNI BRIEF: Aussie Monthly CPI Falls 20bp Below Expectations

Australia’s monthly Consumer Price Index (CPI) indicator rose 2.1% y/y in May, 20 basis points below expectations, while the annual trimmed mean measure fell 40bp to 2.4%, data from the Australian Bureau of Statistics showed Wednesday.

The headline CPI result marked the lowest reading since October 2024, while the trimmed mean was at its lowest level since November 2021, potentially reinforcing expectations that inflationary pressures are easing more broadly. While the Reserve Bank of Australia monitors the monthly read, it prefers the more complete quarterly data. (See MNI RBA WATCH: Board's Dovish Turn Included Debate Of 50bp Cut)

The largest contributor to the annual increase was food and non-alcoholic beverages (+2.9%), followed by housing (+2.0%) and alcohol and tobacco (+5.9%).

The CPI excluding volatile items and holiday travel rose 2.7% y/y in May, compared to a 2.8% increase in April, indicating a modest slowdown in core inflation pressures.