MNI BRIEF: Aussie Trimmed CPI At 2.7%, 0.6% Q/Q

Australia’s trimmed mean inflation slowed to 2.7% year-on-year in the June quarter, down 20 basis points from the previous period, with a quarterly increase of 0.6%, according to data released Wednesday by the Australian Bureau of Statistics, which also showed headline CPI easing 20bp to 2.1% y/y.

The Reserve Bank of Australia had expected in May trimmed mean inflation, its preferred measure, to print at 2.6% in Q2, assuming a 4.0% cash rate. The actual cash rate remains at 3.85% following a 25bp reduction in May. (See MNI RBA WATCH: Board Shocks With Hold As Trade Fears Ease)

The monthly CPI indicator for June showed trimmed mean inflation at 2.1% year-on-year, though the RBA places limited emphasis on the monthly reading and prefers the full-quarter data when assessing inflation.

The ABS noted that the main contributors to the quarterly inflation rise were housing, which rose 1.2%, food and non-alcoholic beverages, which increased 1.0%, and health, which rose 1.5%. These gains were partially offset by a 0.7% fall in transport costs.

Annual goods inflation eased to 1.1%, down from 1.3% in the March quarter, while annual services inflation also slowed, falling to 3.3% in the June quarter from 3.7% previously.