The data for the second quarter CPI shows (as generally expected) that inflation has moved further above the RBA’s target range of 2-3%. Headline CPI was up 1.8% q/q for a y/y increase of 6.1% (up from 5.2% in the March quarter).
The RBA’s Core inflation measure also increased; up 1.5% q/q or 4.6% y/y (up from 3.4% y/y in Q1).
Tradables led the move higher (+8.0% y/y) while Non-tradables were up 5.3% y/y.
Discretionary spending inflation rose by 4.0% y/y while Non-discretionary was up almost twice that at 7.6% y/y.
When we account for the differences in spending patterns in the regions, as opposed to the Capital Cities in which the CPI is calculated, we see a wide variety of outcomes across the nation. In Brisbane CPI sat at 7.3% y/y while in the Rest of Queensland our model shows headline inflation of 7.9% y/y. The result for the Conus All Australia CPI in Q2 is +1.8% q/q and +6.3% y/y.
A full discussion of the methodology behind the Conus All Australia CPI can be found here.