October CPI printed at 2.1%, lower than expected but in line with September. However, the trimmed mean increased to 3.5% from 3.2%, the highest since July. The first month of the quarter has limited updates for services components. The RBA is currently focusing on underlying and services measures due to the temporary decline in headline inflation from government electricity rebates. It also prefers the quarterly CPI data with Q4 out on January 29.

• Seasonally adjusted headline CPI rose 0.1% m/m and ex volatile items & holiday travel fell 0.2% m/m and moderated to 2.4% y/y from 2.7%, the lowest in almost three years.
• While services prices were not fully updated the component rose to 4.8% y/y, down marginally from October 2023’s 5.0% y/y.
• The ABS reports that electricity prices fell 12.3% m/m and 35.6% y/y, a record. Auto fuel fell 11.5% y/y.
• Rents rose 6.7% y/y, but without Commonwealth Rent Assistance they would have risen 8.1% y/y.
• Fruit & veg prices rose 8.5% y/y due to lower supply for some items.
• The ABS notes that the correction to childcare costs reduced annual CPI inflation by 0.05pp and trimmed mean by 0.02pp.
• See ABS press release here.

Australia CPI y/y%