In line with market expectations, the inflation data released by the ABS today shows CPI back within the RBA’s 2-3% target range.
For the March quarter headline CPI rose by 0.5% for an annual increase of 2.1% (up from 1.5% in the previous quarter). The RBA’s preferred “core” measures of inflation (Trimmed Mean and Weighted Median) were up an average of 1.8% for the year.
Certainly inflationary pressures remain muted and this data will not be forcing the RBA’s hand on rate hikes any time soon. However, it is worth noting that the Tradables inflation measure (basically prices of goods that trade on foreign markets) was up 1.3% which, while still low, is the highest it’s been in 3 years. Non-tradables inflation was at 2.6%.