Australia Inflation Rate at 17-Year Low in Q2
Consumer prices in Australia rose 1.0 percent through the year to the June quarter of 2016 from 1.3 percent in the previous quarter and slightly below market consensus. It was the lowest inflation rate since the second quarter 1999. On a quarterly basis, consumer prices rose 0.4 percent, following a 0.2 percent drop in the March quarter and in line with expectations.
Year-on-year, cost increased for: alcohol and tobacco (+5.9 percent from +6.1 percent in the March quarter); housing (+1.3 percent from +1.7 percent); furnishing, household equipment and services (+1.6 percent from +2.0 percent), health (+4.5 percent from +4.6 percent), recreation & culture (+0.8 percent from +0.1 percent), education (+3.3 percent from +3.3 percent) and insurance and financial services (+2.4 percent from +2.3 percent). In contrast, cost declined for clothing & footwear (-0.2 percent from -0.8 percent), transport (-2.8 percent from -0.5 percent) and communication (-7.2 percent from -6.4 percent). Prices of food and non-alcoholic beverages also dropped by 0.1 percent, after remaining unchanged in the preceding quarter.
RBA Trimmed Mean CPI rose 1.7 percent year-on-year in the second quarter of 2016, the same pace as in the preceding quarter and above estimates of a 1.5 percent rise. Quarter-on-quarter, the index increased 0.5 percent, up from 0.2 percent in the first quarter. RBA Weighted Mean CPI rose 1.3 percent year-on-year in the three months to June, compared to a 1.4 percent in the preceding quarter. For 2016, Australia's central bank targets core inflation of between 2.0 percent to 3.0 percent on average.
On a quarterly basis, consumer prices rose 0.4 percent, following a 0.2 percent drop in the previous three months and in line with expectations. The most significant price rises in the June quarter were in medical and hospital services (+4.2 percent, driven by the annual increase in private health insurance premiums), automotive fuel (+5.9 percent, largely due to increases in unleaded, premium and ethanol fuels) and tobacco (+2.1 percent). These rises were partially offset by falls in domestic holiday travel and accommodation (–3.7 percent), motor vehicles (–1.3 percent) and telecommunication equipment and services (–1.5 percent).
7/27/2016 4:56:49 AM