AUSTRALIA DATA: November Inflation Moderates, Q4 CPI Key February RBA Input

November CPI inflation data moved in the right direction for the RBA to prolong its pause but remain cautious as underlying 3-month momentum remains elevated. As this data is only new with little track record, the RBA will be looking to the Q4 data due on 28 January but November is a start in achieving its forecast of a return of trimmed mean to the band by end 2026. 

• November trimmed mean rose 0.3% m/m sa and moderated to 3.2% y/y from 3.3% but the Q4 average to date at 3.2% is above Q3’s 3.1% average and Q2’s 3.0%. The quarterly Q3 release was 3.0%. CPI ex volatile items & holiday travel eased 0.4pp to 3.6% y/y.
• The new trimmed mean CPI appears less volatile than the incomplete series but printed 0.7pp higher at 2.8% y/y in June 2025, which was the recent trough. Q2 was at 2.7% y/y overall. Ex volatile items & holiday travel has a better fit with the old monthly data.

Australia CPI y/y%

Source: MNI - Market News/ABS

• The RBA is focused on domestically-driven services prices, as they have been sticky here and overseas. November services moderated to 3.6% y/y from 3.9% with underlying market services at 2.9% after 3.2%. The Q4 average of the latter is 3.0% after Q3’s 2.9% (Q3 average 2.84%).
• Good prices moderated to 3.3% from 3.8% with core goods at 2.6% after 2.8%. The ABS notes that the new series has more information on “temporary effects” and it observed Black Friday discounts in 2025 were “not a major contributor to the change in annual CPI inflation” in November.
• Headline continues to be impacted by government electricity rebates which drove a moderation to 3.4% y/y from 3.8% and rose 0.2% m/m sa. Electricity inflation was up 19.7% y/y down from 37.1% and excluding rebates electricity rose 4.6% y/y after 5.0%.

Australia CPI goods vs services y/y%

Source: MNI - Market News/ABS
*The new monthly CPI series is spliced onto the old CPI given the close fit.