The March quarter Consumer Price Index surprised with a smaller than expected rise of just 0.6% after a 0.9% in the December quarter.
That took the annual rate to 1.1% up from 0.9% in the December quarter, according to the latest inflation report from the Australian Bureau of Statistics.
That is a long way from the Reserve Bank’s old 2% to 3% inflation target over time, let alone the new one which calls for inflation to be in the 2% to 3% (on an underlying basis) range for a long period of time.
The key underlying inflation measures favoured by the Reserve bank confirmed the weakness – one of the two measures, the trimmed mean showed the lowest annual growth rate on record – just 1.1%, dipping from the 1.2% reading for the December quarter and last year as a whole.
The trimmed mean and weighted median 9the other core measure) averaged a gain of just 0.35% in the march quarter, which is getting very close to deflation.
The weak result for the quarter came despite an 8.7% jump in petrol prices in the quarter.
The federal government’s Home Builder scheme helped keep a lid on housing costs, as did similar schemes in several states.
The ABS said that a 7.3% rise in prices for accessories “reflected high consumer confidence and demand for discretionary items such as jewellery, allowing jewellers to pass through elevated input costs.”
Great for jewellers such as Michael Hill and for accessory retailers such as Lovisa.
Tertiary education costs also fell but the Federal government’s resetting of the Medicare and Pharmaceutical Benefits Scheme safety nets saw a 5.3% rise in pharmaceutical product costs.
